UnitedHealthcare to Pick Up Guardian Life Group Medical Business

Guardian Life Insurance Company of America is completing its exit from group medical insurance, with a portion of its business going to UnitedHealthcare.

Guardian Life has been a regional, niche player in group medical and "marketplace dynamics" have made it increasingly difficult to compete against the large, national health insurers, said Richard Jones, a spokesman for the New York-based Guardian Life, one of the largest mutual life insurers in the United States.

"We didn't have the scale to compete," Jones said.

Over the next two years Guardian's group preferred provider organization business will transition to UnitedHealthcare. Guardian informed its brokers a few weeks ago, Jones said.

The group medical business represents about 1,700 employer plans, mostly small and medium-size employers, and about 42,000 covered employees, he said. Group medical represented 7% of companywide premium in 2010, Jones said.

A spokesperson for UnitedHealthcare (NYSE: UNH) declined to comment on total premium involved in the agreement with Guardian.

Last fall, Principal Financial Group (NYSE: PFG) said it decided to leave the medical insurance business, stopping new sales immediately and gradually moving its existing policyholders to UnitedHealthcare over a three-year period (BestWire, Sept. 30, 2010).

Guardian Life started pulling out of group medical in 1997 and exited about 20 states for this line of business in 2000, Jones said, noting the move wasn't related to health reform, he said.

The company is focusing on its main business -- nonmedical -- which includes dental, vision, life and disability. Non-medical currently accounts for 95% of new business sales for the company, Jones said.

Guardian, which has about 100 employes in its group medical area, doesn't anticipate immediate layoffs, he said.

"It is certainly hoped that as our non-medical area grows it will create opportunities for employees to post for other positions in the company," Jones said.

Guardian Life Insurance Company of America currently has a Best's Financial Strength Rating of A++ (Superior). UnitedHealthcare Insurance Co. currently has a Best's Financial Strength Rating of A (Excellent).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])