Traveling Light At TravelersTim Smart
Sandy Weill is not a patient guy. In January, making it known he was displeased with Travelers' laggard group-health business, he merged it with Metropolitan Life's health unit. He vowed that the resulting company, MetraHealth, would become a national managed-care power. But it didn't happen fast enough: On June 27, MetraHealth was sold to HMO giant United HealthCare. Travelers will receive $816 million of the $1.65 billion price in cash, plus more in future payments.
With the deal, Weill exits the health business, leaving Travelers free to focus on its consumer finance, life insurance, and securities units. His goal: build a low-cost distribution network that can wholesale financial products to a broad range of consumers. Meanwhile, he keeps slashing costs with layoffs and targeted asset sales. He got rid of $1.5 billion in real estate last year, reducing Travelers' mortgage and real estate portfolio 60%. As a result, its insurance operation saw record operating earnings of $600 million. That's the work of a guy in a hurry.