A.M. Best Comments on Aetna's Proposed Acquisition of ActiveHealth Ma

    Business Editors/Insurance Writers

    OLDWICK, N.J.--(BUSINESS WIRE)--May 16, 2005--A.M. Best Co. comments that it views favorably Aetna Inc.'s (Aetna) (NYSE:AET) (Hartford, CT) proposed $400 million acquisition of ActiveHealth Management. The transaction purchase price and business focus are consistent with Aetna's near-to-medium term acquisition strategy. Owing to Aetna's excellent financial fundamentals and favorable forecast, all ratings remain unchanged.
    Aetna is seeking to grow its unregulated health care business by expanding the firm's health care information management presence. Acquired services would include predictive modeling and care management capabilities directed toward self-insured national accounts, third-party administrators and other insurance companies.
    Aetna could be challenged to grow this business' free cash flow sufficiently during the medium term to justify the acquisition price. Drivers include the business' currently modest cash flows, and the degree of willingness of health care insurance companies to purchase these services from a firm owned by a traditional competitor.
    Transaction financing will not impact negatively Aetna's high quality balance sheet and earnings stream, the latter providing excellent debt service coverage. Aetna continues to maintain conservative financial leverage, a strong holding company cash position, well-capitalized regulated entities, sufficient reserves, high-quality invested assets and excellent financial flexibility.
    For Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.
    For current Best's Ratings, independent data and analysis on more than 1,050 health companies and more than 130 HMO industry composites, please visit http://www.ambest.com/health.
    A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.

--30--SH/na*

CONTACT: A.M. Best Co., Oldwick Public Relations: Jim Peavy, 908-439-2200, ext. 5644 james.peavy@ambest.com or Rachelle Striegel, 908-439-2200, ext. 5378 rachelle.striegel@ambest.com or Analysts: Christian Miles, 908-439-2200, ext. 5026 christian.miles@ambest.com or Dana Mehta, 908-439-2200, ext. 5061 dana.mehta@ambest.com

KEYWORD: CONNECTICUT NEW JERSEY INDUSTRY KEYWORD: INSURANCE SOURCE: A.M. Best Co.

Copyright Business Wire 2005