Aetna buyers offer reassurance

By KENNETH R. GOSSELIN

July 21, 2000 Web posted at: 10:12 AM EDT (1412 GMT)

In this story: In Hartford to stay Good citizenship RELATED STORIES

HARTFORD, Connecticut (The Hartford Courant) -- The buyers of Aetna Inc.'s prized financial units came to Hartford on Thursday carrying assurances that few jobs would be lost. Some might even be created.

ING Group officials said they plan on hiring about 200 of Aetna's 3,000 corporate employees to help operate the two units the Dutch company will purchase from Aetna.

And Aetna officials said that most of the remaining 2,800 jobs would be transferred to the new health care company that Aetna will create.

As part of the $7.7 billion deal announced early Thursday, ING is committing to keep the 2,670 employees who work in Aetna's financial services and international units in Greater Hartford.

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But officials of the two companies said there is no required time limit on how long the jobs have to remain in Connecticut.

There is good reason to be optimistic, however, ING officials said.

"This is an exciting day for ING,'' said Fred S. Hubbell, chairman of ING Americas and ING Asia/Pacific Executive Committees. "We are making a substantial commitment to Hartford as we make the largest acquisition in our history by transaction value."

ING tried to quell worries about job loss and corporate giving. Officials of the Amsterdam-based financial services conglomerate also stressed that ING was in Hartford to stay - and that Connecticut could benefit from ING as a corporate citizen.

ING said it has signed a seven-year lease for the Tower Building, at Farmington Avenue and Flower Street in Hartford, where Aetna's financial services unit is now located.

In addition, ING said one of its main business lines - administering and managing assets of 401(k) and other employer-sponsored retirement plans - would have its headquarters in Hartford.

That segment of retirement planning is the chief business of Aetna Financial Services, employing almost 90 percent of Aetna's financial services workers in Connecticut.

Hubbell said it was the 401(k) business that also was the gem in the Aetna acquisition, filling a hole in ING retirement offerings.

Aetna has carved out a niche, offering the plans to public employees, health care workers and teachers. In addition, Aetna started serving small businesses, which are increasingly providing the plans to their workers.

In just five years, assets under management have tripled, to $77 billion, propelled upward by the demographic shifts from saving to investing for retirement.

For three years, ING will be allowed to use the Aetna name on its products, most likely paired with the ING name. Eventually, the Aetna name will be phased out.

"We are excited about the opportunities for growth in this business," Hubbell said.

Whether the growth translates into new jobs remains to be seen. But Hubbell said ING is committed to Hartford.

The sale of the Aetna units created anxiety not only about jobs but to what extent a new company would take its place as a corporate citizen.

Traditionally, ING has allowed the companies it has acquired to continue corporate giving and civic involvement, as long as the company met profitability targets.

The Aetna purchase had the potential to be different because ING was buying just parts of a company.

But Thomas J. McInerney, president of Aetna Financial Services, said the unit has pursued charitable giving, separate from its Aetna Inc. parent.

For instance, it has pledged $500,000 over five years to The Bushnell for student educational programs in the arts. In May, the unit contributed $2.7 million to add a faculty chair to the University of Connecticut business school and create the Aetna Center for Financial Services.

"Clearly, this reflects our commitment to Hartford and to Connecticut," McInerney said.

McInerney, who will become the CEO of ING's new unit in Hartford, said it also is possible that a new foundation for giving could be created once the ING acquisition is complete. John Kim, president of the financial services subsidiary Aeltus Investment Management Inc., will also join ING.

Hartford - and the rest of Connecticut - could benefit from the resources of the mammoth ING, a global player that set an aggressive goal to build a U.S. franchise and met it.

Two years ago, ING set out to join the ranks of the top 10 U.S. insurers. ING scored giant leaps this year by announcing a deal for ReliaStar Financial Corp in Minneapolis and then, on Thursday, for the Aetna units.

If it successfully completes deals for both Aetna and ReliaStar, ING will be the sixth-largest insurer in the United States.

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