The Hartford Insurance Group, Inc. · NYSE:HIG
The Hartford Insurance — The Hartford Financial Services Group — Merger or Acquisition (October 2017)
21 slides from The Hartford Insurance's merger presentation, Oct 23, 2017
Slide 1: The Hartford to Acquire Aetna's U.S. Group Life and Disability Business
The Hartford Financial Services Group, Inc. October 23, 2017 The Hartford to Acquire Aetna’s U. S. Group Life and Disability Business Copyright © 2017 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.
Slide 2: Safe harbor statement
Safe harbor statement Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford’s future results of operations. We caution investors that these forward-l
Slide 3: The Hartford to acquire Aetna's U.S. group life and disability business
The Hartford to acquire Aetna’s U.S. group life and disability business • The Hartford to acquire Aetna’s U.S. group life and disability business for $1.45 billion in cash – Acquisition structured as a reinsurance transaction – Purchase price largely allocated to intangibles, including value of busi
Slide 4: Acquisition overview
The Hartford to acquire Aetna’s U.S. group life and disability business Acquisition overview Benefits of the acquisition Key capital and financial items Copyright © 2017 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of Th
Slide 5: The Hartford to pay $1.45 billion to acquire Aetna's U.S. group business via reinsurance
The Hartford to pay $1.45 billion to acquire Aetna’s U.S. group life and disability business via reinsurance • Hartford Life and Accident Insurance Company Pro Forma Group Benefits Premium1 (HLA), the primary group benefits insurance 2016 Full Year ($ in billions) operating subsidiary of The Hartfor
Slide 6: Aetna Group Insurance overview
Aetna Group Insurance overview • Aetna Group Insurance (AGI) is a leading provider of large case employee benefits Aetna Group Insurance by Product2 products and services in the U.S. 2016 Premiums: $2.0 billion – Annual premium of $2.0 billion in 2016 – #7 in fully insured group disability in force1
Slide 7: Benefits of the acquisition
The Hartford to acquire Aetna’s U.S. group life and disability business Acquisition overview Benefits of the acquisition Key capital and financial items Copyright © 2017 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of Th
Slide 8: The Hartford's leading position in the Group Benefits market
The acquisition is a unique opportunity and solidifies The Hartford’s leading position in the Group Benefits market Increases ▪ The Hartford to become #2 insurer in the group life and disability market, market up from #51 presence ▪ Combines two complementary franchises that are both committed to hi
Slide 9: Increases The Hartford's presence in the Group Benefits marketplace
Increases The Hartford’s presence in the Group Benefits marketplace • Provides a unique opportunity for The Combined Claims Service Centers Hartford to become #2 insurer in the group Geographic reach to execute on service delivery life and disability market, up from #5 across the country with 9 clai
Slide 10: Accelerates The Hartford's technology strategy and digital capabilities
Accelerates The Hartford’s technology strategy and digital capabilities • Provides advanced absence Integrated Absence Management Platform management capabilities that will improve customer experience and can be leveraged across The Hartford WorkAbility ® – Fully integrated absence management Integr
Slide 11: Enhances The Hartford's distribution footprint
Enhances The Hartford’s distribution footprint • Increases sales force by 45% to over 250 Sales Force by Location employees, including sales representatives and account managers WA ME • Increases penetration in majority of brokers OR MT ND VT MN NH ID MA SD WI • Enables expansion of product offering
Slide 12: Expands data and advanced analytical capabilities for better recovery management
Expands data and advanced analytical capabilities for better recovery management • As #2 workers’ compensation insurer, and now, the #2 group life and disability WorkAbility ® Portal insurer, we can capitalize on our competitive advantages around Access to recovery management Disability on Mobile •
Slide 13: Key capital and financial items
The Hartford to acquire Aetna’s U.S. group life and disability business Acquisition overview Benefits of the acquisition Key capital and financial items Copyright © 2017 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of Th
Slide 14: Summary estimated financial impacts of the acquisition
Summary estimated financial impacts of the acquisition, subject to market values at closing Cash consideration: $1.45 billion Ceding commission ~$1.38 billion Purchase price for operating assets (software, equipment, etc.) ~$0.07 billion 2018 estimates of earnings accretion1: Net income, after tax +
Slide 15: Purchase price and capital funded through corporate resources
Purchase price and capital funded through corporate resources, including insurance subsidiary dividends and holding company resources • $1.45 billion cash consideration paid principally with P&C and Talcott Resolution dividends totaling $1.4 billion – $600 million extraordinary dividend from P&C, Fu
Slide 16: Pro forma impacts on The Hartford's consolidated balance sheet
Pro forma impacts on The Hartford’s consolidated balance sheet • In addition to the in-force premium, The Consolidated Pro Forma GAAP Balance Sheet1 Hartford will receive an estimated $3.42 Pro Forma billion of invested assets and 9/30/17 9/30/17 Transaction approximately $3.32 billion of policyhold
Slide 17: Estimated pro forma impacts on year-end 2017 HLA statutory balance sheet
Estimated pro forma impacts on year-end 2017 HLA statutory balance sheet • HLA to assume approximately $2.0 billion of annual premium, $3.0 billion of statutory policyholder HLA Statutory Balance Sheet benefit reserves and $3.3 billion of statutory invested assets Previous – The Hartford to contribu
Slide 18: Appendix – Discussion and reconciliation of GAAP to non-GAAP financial measures
Appendix – Discussion and reconciliation of GAAP to non-GAAP financial measures Copyright © 2017 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.
Slide 19: Discussion of non-GAAP financial measures
Discussion of non-GAAP financial measures The Hartford uses non-GAAP financial measures in this presentation to assist investors in analyzing the projected impact of the transaction described herein on the company’s operating performance for the periods presented. Because The Hartford's calculation
Slide 20: Discussion of non-GAAP financial measures - continued
Discussion of non-GAAP financial measures - continued Book value per diluted share excluding accumulated other comprehensive income ("AOCI”): Book value per diluted share excluding AOCI is a non-GAAP financial measure based on a GAAP financial measure. It is calculated by dividing (a) common stockho
Slide 21: Discussion of non-GAAP financial measures - continued
Discussion of non-GAAP financial measures - continued Tangible book value per diluted share excluding accumulated other comprehensive income ("AOCI”): Tangible book value per diluted share excluding AOCI is a non-GAAP financial measure based on a GAAP financial measure. It is calculated by dividing
The Hartford Financial Services Group — Merger or Acquisition (October 2017) on 6ix