Fitch to lower Aetna’s rating following Humana acquisition

Fitch to lower Aetna’s rating following Humana acquisition

Fitch to lower Aetna’s rating following Humana acquisition Fitch Ratings announced Friday in a news release that it would lower Aetna’s financial ratings by a full step once the insurer acquires Humana later this year, reported journalinquirer.com.

From “A-,“ Aetna’s rating (considered “high credit quality”) would move to BBB, which means “good credit quality.”

On Fitch’s website, the lower rating is further defined. The BBB rating means that a company’s “capacity for payment of financial commitments is considered adequate.” The same rating, however, suggests that “adverse business or economic conditions are more likely to impair this capacity.”

In April, Aetna posted a 6.5% decline in net earnings for the first quarter of the year.

“Assuming the acquisition and its financing are completed as currently envisioned, upon close of the acquisition, Fitch expects to downgrade Aetna’s ratings,” Fitch’s analysts said in the news release.

Aetna’s anticipated ratings downgrade puts the insurer in Fitch’s “Rating Watch Negative” status. It reflects, as the ratings agency puts it, “significant deterioration” in the company’s financial standing after it closes the Humana deal. It also suggests the “potential operational and/or earnings disruptions that could arise as these two very large and complex organizations are integrated.”

Fitch also said that it does not expect Aetna’s rating to “return to a level considered appropriate for its current rating category” within one or two years after the Humana acquisition.

In April, CEO Mark T. Bertolini stated that following the merger, Aetna’s Medicare and Medicaid insurance operations would be moved to Humana’s headquarters in Louisville, Kentucky. Bertolini has not said what would happen to Aetna’s 6,500 employees in Connecticut.
1 Comments
  • Anonymous 11/24/2016 5:05:52 PM
    It is my opinion: Years ago, I purchased a long-term and a short term disability policy from Aetna through my employer. Over 2 years ago, I became disabled because age and numerous other health issues, verified by 3 doctors and other insurance companies. Aetna harassed my spouse and I, threatened me with job termination, discontinued my employer pay and benefits, conveniently lost or never received documents my doctors and I sent to them several times, misquoted and distorted facts in medical documents I submitted, forced me to retire because of no pay or benefits, committed fraud, made numerous mistakes always in Aetna’s favor, told me verbal lies in phone conversations, made outrageous demands under the threat of being fired “if you don’t go to the doctor today and submit these forms you will be terminated from your job”, Etc, Etc., Etc. Aetna CEO Mark Bertolini's compensation was valued at $17.3 million last year. He got it by screwing people like you and I. Don’t get Aetna insurance for any coverage of any kind. Aetna will not pay claims and will do anything to avoid paying. If you do have Aetna coverage, get rid of them ASAP. If you do have problems with Aetna, keep a log, FAX or send all documents 3 times and file a complaints with your state department of insurance.

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