Aetna Life & Casualty Co. said yesterday that it would eliminate 2,600 jobs as part of a program of broad changes.
Coming on the heels of similar reports by other leading U.S. insurers, the announcement is a sign of continuing problems in the industry.
The Hartford-based insurer said the move would save the company $50 million next year and more after that. The job reductions were announced along with the company's third-quarter earnings, which were down sharply.
Analysts praised the move as necessary although painful.
They said it reflected a retrenchment across the industry after nearly two decades of rapid growth.
Insurance companies have been experiencing some of the credit problems of banks and other financial institutions in the face of falling real estate values and a decline in high-yield "junk bond" portfolios.
"Other than the people losing their jobs, I think it's terrific," said A.Michael Frinquelli, an analyst with Salomon Bros.
"The decade of the 1990s will be one of retrenchment. The whole economy is going through that, and insurers, since they reflect the overall economy, are retrenching, too. This isn't just Aetna. It's a foregone conclusion industrywide."
On the New York Stock Exchange yesterday, Aetna's shares gained 25 cents, to $31.
Most of the job eliminations will come from Aetna's three Hartford-area offices.