Aetna Acquires the Chickering Group

Business provides health insurance coverage to college students

HARTFORD, Conn., December 16, 2003 — Aetna (NYSE: ΑET) today announced that it has acquired The Chickering Group, a leading brokerage firm and administrator in providing health benefits to students enrolled in colleges and universities. The transaction price was not material to Aetna.

Aetna and Chickering have had a successful five-year relationship serving approximately 283,000 students and more than 100 colleges and universities. Aetna now will own 100 percent of both Chickering Group entities -- its third-party administration business for student health products and its brokerage subsidiary, which has been responsible for the marketing and customer relationships with the colleges and universities.

"This transaction meets our objective of making targeted, strategic acquisitions that are consistent with our goal of achieving profitable growth," Chairman and CEO John W. Rowe, M.D., said. "Chickering is a recognized leader in the marketing and administration of the highly specialized student health insurance market. Currently, only 2 million of the nation’s 14.5 million college students get their coverage from school-sponsored student health plans. We believe this represents an excellent growth opportunity for Aetna in the future."

The Aetna-Chickering partnership has grown over the past five years to become the largest provider of college student health insurance (measured by premium volume), providing coverage to 283,000 students and dependents at more than 100 colleges and universities across the country. Chickering’s unique specialty approach to the student health business has differentiated it in the marketplace and will be maintained. It will continue to operate as "The Chickering Group, an Aetna Company" focused on student health. The operation will continue to be based in Boston; and its staff, leadership, systems and business approach will remain largely the same.

"We intend to continue to expand Chickering’s position in this market by leveraging Aetna’s network strength in new geographies where Chickering has not had a presence, and by offering other Aetna programs and resources to this business," said Tim Brown, Aetna senior vice president, Middle Market Accounts and Health Care Delivery. "Chickering’s current customers will continue to receive the exceptional service they have received in the past."

Frederick H. Chicos, president and chief executive officer of The Chickering Group, said, "This agreement positions Chickering to further expand its leadership position in the student health insurance marketplace. Aetna has one of the largest provider networks in the country, which has become an important feature of successful student health programs. Aetna has demonstrated its commitment to serving the student health market, and we are pleased to offer our customers all the advantages Aetna will provide."

Aetna is one of the nation’s leading providers of health care, dental, pharmacy, group life, disability and long-term care benefits, serving approximately 13.0 million medical members, 11.0 million dental members, 7.4 million pharmacy members and 12.1 million group insurance customers, as of September 30, 2003. The company has expansive nationwide networks of more than 590,000 health care services providers, including more than 355,000 primary care and specialist physicians and 3,577 hospitals. For more information about Aetna, please visit the company’s web site at

ADDITIONAL INFORMATION; CAUTIONARY STATEMENT -- Certain information in this press release is forward looking. Forward-looking information is based on management’s estimates, assumptions and projections; and is subject to significant uncertainties and other factors, many of which are beyond Aetna’s control. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management. Those risk factors include, but are not limited to: unanticipated increases in medical costs (including increased medical utilization, increased pharmacy costs, increases resulting from unfavorable changes in contracting or recontracting with providers, changes in membership mix to lower-premium or higher-cost products or membership-adverse selection; as well as changes in medical cost estimates due to the necessary extensive judgment that is used in the medical cost estimation process, the considerable variability inherent in such estimates, and the sensitivity of such estimates to changes in medical claims payment patterns and changes in medical cost trends); decreases in membership levels; increases in medical costs or Group Insurance claims resulting from any acts of terrorism; the ability to achieve targeted savings from work force reductions and to otherwise reduce administrative expenses in light of significant membership reductions recently experienced; the ability to maintain targeted levels of service, and improve relations with providers, as well as operating performance, while making significant staff reductions and taking actions to reduce medical costs; the ability to continue to successfully implement Aetna’s new operating model; lower levels of investment income from continued lower interest rates; adverse government regulation (including legislative proposals to eliminate or reduce ERISA pre-emption of state laws that would increase potential litigation exposure, and other proposals, such as the Patients’ Bill of Rights, that would increase potential litigation exposure or mandate coverage of certain health benefits); adverse pricing actions by government payors; changes in size, product mix and medical cost experience of membership in key markets; and the outcome, including any negotiated resolution, of various litigation and regulatory matters, including ongoing reviews of business practices by various regulatory agencies. For more discussion of important factors that may materially affect Aetna, please see the risk factors contained in Aetna’s 2002 Annual Report on Form 10-K, on file with the Securities and Exchange Commission. You also should read Aetna’s 2002 Annual Report on Form 10-K and Aetna’s 2003 Third Quarter Report on Form 10-Q filed with the Securities and Exchange Commission for a discussion of Aetna’s historical results of operations and financial condition.

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