The group benefits business is part of the company’s group disability and other operations division, which, reported $1.31 billion of adjusted revenue in the quarter ended June 30. (Photo: AP)

In the latest example of big businesses narrowing their product portfolio, Cigna Corp. is rumored to be exploring a potential sale of its group benefits insurance business, worth possibly as much as $6 billion.

The news was first reported by Reuters, citing information from a four unnamed sources familiar with the situation, who added that Cigna’s move indicates its heightened focus on health care after it spent $54 billion last year to acquire pharmacy benefits manager Express Scripts Holding Co.

A company spokesperson neither conformed nor denied the news, saying, “Given the dynamic marketplace, we continually review opportunities to ensure we continue to deliver value to our customers and clients.”

The group benefits business is part of the company’s group disability and other operations division, which, according to Cigna’s Q2 financial statement, reported $1.31 billion of adjusted revenue in the quarter ended June 30, covering 15.4 million people as of then.

An investment bank is assisting with the efforts to find a buyer, which could come from among other insurers that already offer a similar product line and would be able to benefit from scale through such an acquisition.

The company is not the first to winnow down its product line. In October of 2017, Aetna Inc. announced the sale of its U.S. group life and disability unit for $1.45 billion to Hartford Financial Services Group.

Cigna hopes, with the acquisition of Express Scripts, to get a jump on the current quest to lower health care costs prior to the 2020 election in an atmosphere of regulatory uncertainty. However, the Express Scripts purchase has also put it into direct competition with CVS Health Corp. and its 2018 acquisition of Aetna and also UnitedHealth Group Inc. and its pharmacy benefit manager Optum.

The company could also get a boost toward paying down some of its long-term debt of $37 billion (as of the end of June) out of the proceeds of the group benefits sale.

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Is Cigna selling its group benefits business?

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