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Hartford to buy Aetna’s US life and disability business

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(Reuters) - Hartford Financial Services Inc. said on Monday it would buy health insurer Aetna Inc.’s U.S. group life and disability business for $1.45 billion cash in a move that will expand its insurance portfolio and spur its digital technology plans.

Hartford will have more than 20 million customers following the deal and stretch its reach in offering workers compensation to more mid-size and large companies.

The deal will also give Hartford access to Aetna’s digital assets to improve its workers compensation and disability claims processes. The assets include an integrated absence management platform.

Hartford’s group benefits business took in $803 million as premium at the end of the third quarter, which is 23% of the company’s total premium earned.

The insurer will fund the deal by dividends from its insurance units and holding company resources. It will not issue debt or equity.

Aetna’s group life and disability insurance unit had premiums of about $2 billion in 2016, Hartford said.

The acquisition, which is expected to close in early November, would add to Hartford’s earnings in 2018.

Aetna will use the proceeds for share repurchases and repay debt.

The health insurer will also offer Hartford’s group life and disability products through its medical sales team.

Hartford also reported third-quarter core earnings fell 46% year on year to $222 million, weighed by higher losses caused by recent hurricanes and wildfires.