Hartford health insurer Aetna announced Monday that it has reached to an agreement to acquire the Medicare supplement business of Genworth Financial Inc.
Aetna will pay $290 million to acquire 100 percent  of the stock of Continental Life Insurance Company of Brentwood, Tennessee , and reinsure certain related blocks of in-force business.
Aetna said it expects to finance the acquisition with available resources.
The deal will add 145,000 Medicare Supplement members to Aetna’s roster.
“By acquiring this business, Aetna will significantly expand its footprint in the Medicare Supplement business,” said Mark T. Bertolini, Aetna’s chairman, CEO and president. “This important growth opportunity comes at a time when the Medicare population is anticipated to increase as ‘Baby Boomers’ reach age 65. Medicare Supplement is expected to be a fast-growing product in the coming years as individuals seek peace of mind for out-of-pocket costs and employers look for added retiree coverages.”
The transaction will be treated as an asset purchase for tax purposes and is subject to customary closing conditions, including federal Hart-Scott-Rodino antitrust and state regulatory approvals. The transaction is expected to close during the fourth quarter of 2011, and is projected to be neutral to Aetna’s earnings in 2012 and modestly accretive thereafter.
Medicare Supplement products cover deductibles, co-pays and other expenses not covered under Medicare Parts A and B. CLI also offers ancillary products such as Accident & Health and Final Expense coverages. The business being acquired had approximately $317 million in net earned premium for 2010.
Aetna expects to maintain the business’ current management, staff and operations, which are primarily based in Tennessee.
