Hartford, Conn.-based Aetna entered a four-year reinsurance arrangement with Vitality Re VIII Limited as part of its long-term capital management strategy.
Through the transaction, Aetna will be able to reduce its required capital and provide $200 million of collateralized excess of loss reinsurance coverage on a part of its group commercial health plan business.
Aetna's Treasurer David Buda said the "transaction marks the successful completion of [Aetna's] eighth such reinsurance arrangement" and that it will "[improve Aetna's] capital efficiency and reduces [its] weighted average cost of capital."