MOODY'S CONFIRMS CREDIT RATINGS OF AETNA LIFE AND CASUALTY (SENIOR AT A2) AND FINANCIAL STRENGTH RATINGS OF INSURANCE SUBSIDIARIES
New York, 11-29-95 -- Moody's Investors Service confirmed the credit ratings of Aetna Life and Casualty Company (Aetna) and its affiliates following the announcement that Aetna has reached a definitive agreement to sell its property and casualty operations to The Travelers Insurance Group Inc. for approximately $4.1 billion. The sale has been approved by the companies' boards of directors and is subject to regulatory and other customary conditions.
Moody's stated that the sale of the property and casualty operations substantially eliminates the company's exposure to long-tail, third-party exposures as well as any question about whether the ongoing restructuring of the property and casualty operations would be successful. It also provides the company with a substantial amount of capital to invest in its core businesses.
The rating agency expects that a majority of the net proceeds will be invested over the near term in managed health-care networks. Moody's observed that while the health care operations have good market position and profitability, such a potentially large investment will result in a further concentration of operations in a segment that continues to be subject to intense price competition and marketplace reform.
Ratings confirmed include the following:
Aetna Life and Casualty Company -- senior debt rating of A2, provisional senior debt shelf rating of (P)A2, provisional subordinated debt shelf rating of (P)A3, and provisional preferred stock rating of (P)"a2"; counterparty rating of A2. The rating of the company for commercial paper was confirmed at Prime-1.
Aetna Capital L.L.C. -- monthly income preferred securities rating of "a2".
Aetna Life Insurance Company -- insurance financial strength rating of Aa3; counterparty rating of A1.
Aetna Life Insurance and Annuity Company -- insurance financial strength rating of Aa2; counterparty rating of Aa3.
Aetna Casualty and Surety Company intercompany property/casualty pool members -- insurance financial strength ratings of A1 for Aetna Casualty and Surety Company, Aetna Casualty and Surety Company of America, Aetna Casualty and Surety Company of Illinois, Aetna Casualty Company of Connecticut, Aetna Commercial Insurance Company, Aetna Insurance Company, Aetna Insurance Company of Illinois, Aetna Personal Security Insurance Company, Automobile Insurance Company of Hartford, Farmington Casualty Company, and Standard Fire Insurance Company.
Aetna Life & Casualty Company, headquartered in Hartford, Connecticut, reported consolidated assets of approximately $102 billion and shareholders' equity of $6.9 billion as of September 30, 1995.
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