Hartford Financial Services Group has agreed to buy the group benefits business of CNA Financial Corp., Chicago, for about $500 million in cash.
Hartford is getting CNAs group life and accident businesses as well as its short term disability and long term disability businesses. CNAs group long term care insurance business is not part of the deal.
CNA expects the deal to result in an after-tax loss of about $200 million in GAAP financial statements but says the deal will lead to a gain of more than $100 million in statutory financial statements.
Hartford hopes to complete the deal by the end of the year and fund it with a mixture of new debt and equity.
Richard Mucci, a senior vice president at Hartford Life and director of its group benefits operations, will lead the newly combined group benefits organization, Hartford says.
The New York office of Fitch Ratings Ltd. reacted to the announcement by affirming the fixed income ratings of Hartford and the insurer financial strength ratings of Hartfords 3 main life insurance subsidiaries. The Fitch rating outlook is stable.