By David French
Aug 20 (Reuters) - U.S. health insurer Cigna Corp isexploring a sale of its group benefits insurance business, whichcould be valued at as much as $6 billion, four people familiarwith the matter said on Tuesday.
The unit for sale offers disability insurance as well aslife and accidental death and dismemberment coverage to clustersof company employees. Cigna's move to shed it underscores itsdecision to focus on healthcare following its $54-billionacquisition of pharmacy benefits manager Express Scripts HoldingCo last year.
The Bloomfield, Connecticut-based company is working with aninvestment bank to run an auction for the group benefitsbusiness, the sources said. The unit could attract interest fromother insurers that already have this product line and areseeking scale in that competitive market, the sources added.
While stating the company does not comment on rumors andspeculation, a Cigna spokesman said: "Given the dynamicmarketplace, we continually review opportunities to ensure wecontinue to deliver value to our customers and clients."
The sources asked not to be identified because the matter isconfidential.
Cigna's group benefits business sits within the company'sgroup disability and other operations division. This unitreported $1.31 billion of adjusted revenue in the three monthsto June 30, and covered 15.4 million people as of that date,according to Cigna's second-quarter financial statement.
Other health insurers have carried out similar divestitures.Aetna Inc announced in October 2017 that it would sell its U.S.group life and disability unit for $1.45 billion to HartfordFinancial Services Group.
As health insurers face regulatory uncertainty amidpolitical efforts to lower U.S. healthcare costs ahead of the2020 presidential election, Cigna is hoping the acquisition ofExpress Scripts will help rein in its own costs.
That deal put Cigna in direct competition with CVS HealthCorp, which acquired Aetna last year, as well asUnitedHealth Group Inc and its pharmacy benefit managerOptum.
Any proceeds from the sale of its group benefits insurancebusiness could help Cigna pay down its long-term debt, whichtotaled $37 billion as of the end of June.(Reporting by David French in New YorkEditing by Nick Zieminski)