A.M. Best Comments on Prudential Financial's Acquisition of CIGNA's Retirement & Investment Services Division

Business Wire, Nov 18, 2003

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 18, 2003

A.M. Best Co. acknowledges Prudential Financial Inc.'s (Prudential) (NYSE: PRU) (Newark, NJ) recent announcement that it has reached a definitive agreement to acquire the retirement business of the CIGNA Corporation (CIGNA) (NYSE: CI) (Bloomfield, CT) for $2.1 billion in cash. The transaction, subject to regulatory approval, is expected to close in the first half of 2004.

A.M. Best believes that the acquisition is consistent with Prudential's strategy to improve operating returns by effectively deploying capital to expand its core financial products platform. A.M. Best views the transaction favorably as it diversifies Prudential's distribution capabilities in the defined contribution market, expands its presence in the middle-market 401(k) arena and establishes a leading position in the management of stable value assets.

The retirement businesses of Prudential and CIGNA are largely complementary within the defined contribution segment. Prudential has a strong presence in the 403(b) and 457 retirement markets, while CIGNA's defined contribution operations have historically focused on 401(k) plans, which are sold primarily through employee benefit consultants. The combined operation will have over 2 million plan participants and assets under management of $120 billion.

In A.M. Best's opinion, the acquisition will be accretive to Prudential's earnings and will help the organization move closer to its long-term return target. Despite the complementary nature of the acquisition, A.M. Best expects Prudential will realize expense efficiencies within certain back office functions, lowering unit costs and improving operating returns across the retirement business.

Prudential's core affiliated insurance operations are currently rated A (Excellent). The rating outlook is positive on both the organization's financial strength and debt ratings, reflecting Prudential's diverse and substantial sources of revenues and earnings, the prominent market position maintained in its core business lines, its steadily improving operating results and its very strong risk-adjusted capital position. A.M. Best's annual review of the Prudential ratings is currently under way and will be completed during the fourth quarter of 2003.

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 www.ambest.com.