American Financial Group, Inc. (AFG: Quote) said Friday that it has sold its Medicare Supplement and Critical Illness businesses to Cigna Corporation (CI) for about $305 million.
The company will realize an after-tax gain of about $120 million - $130 million on the sale, subject to post-closing adjustments.
AFG's remaining supplemental insurance operations consist of its run-off long-term care business alone. This has a book value of about $170 million and will continue to be based in Austin, Texas.
The company noted that it will transition its Austin-based life and annuity operations to its home office in Cincinnati, Ohio before the end of the year.
AFG additionally added that it is analysing its projected long-term care claims and persistency experience with the assistance of an external actuarial consulting firm, including a comparison to their large, uniform database of industry experience.
The company expects to complete the analysis of the actuarial assumptions used to amortize deferred acquisition costs and establish reserves in its long-term care business prior to the end of 2012.
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by RTT Staff Writer
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