Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, June 15, 1994 TAG: 9406160008
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
The two said they would combine their health care businesses into a new company that will cover 13 million people.
A primary goal will be converting existing traditional health insurance policies to managed-care programs, which offer a wealth of health care services for a set fee and are a rapidly growing portion of the business.
Both Met Life and Travelers have lagged behind other insurance companies working to develop managed-care networks.
The new company, which doesn't yet have a name, will be owned equally by Met Life and Travelers. Metropolitan, which has the larger share of health care customers at 7.1 million, will contribute $280 million to the deal.
Travelers, which has 5.9 million health care customers, will contribute $370 million. The bulk of that will come from the $350 million sale of group life and other businesses to Met Life, including dental, vision, long-term care and accident insurance.
After the deal is concluded, Travelers will continue to write property and casualty and individual life policies and will continue to manage pension funds, the company said.
Since its merger last year with Primerica Corp., a big financial services company, Travelers also is in the securities and money management businesses.
The new company will have 17,500 health care employees and will be headed by Kennett Simmons, former chairman and chief executive of United HealthCare Corp., a Minnesota-based manager of health maintenance organizations.
Simmons helped set up Prudential Insurance Co.'s first managed-care program in the early 1980s.
by CNB