SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Acordia, Inc.
(Name of Issuer)
Common Stock, $1.00 Par Value
(Title of Class of Securities)
004929 10 5
(CUSIP Number)
Michael C. Koetters
Anthem Insurance Companies, Inc.
120 Monument Circle
Indianapolis, IN 46204-4903
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
FEBRUARY 6, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box ____.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 004929 10 5
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Reporting Person
Anthem Insurance Companies, Inc.
35-0781558
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) _____
(b) _____
(3) SEC Use Only _____________________________________________________________
(4) Source of Funds (See Instructions) WC (SEE ITEM 3)
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or (e) _____
(6) Citizenship or Place of Organization INDIANA
Number of (7) Sole Voting Power 8,687,068
Shares Beneficially (8) Shared Voting Power -0-
Owned by Each (9) Sole Dispositive Power 8,687,068
Reporting Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by each Reporting Person 8,687,068
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) _____
(13) Percent of Class Represented by Amount in Row (11) 66.8%
(14) Type of Reporting Person (See Instructions) IC
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ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Schedule 13D relates is the
common stock, par value $1.00 per share ("Common Stock"), of Acordia, Inc.
("Acordia"), a Delaware corporation, whose principal executive offices are
located at 120 Monument Circle, Indianapolis, Indiana 46204-4903.
The percentage of beneficial ownership reflected in this Schedule 13D is
based upon 13,009,390 shares of Common Stock outstanding on November 30,
1996.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Anthem Insurance Companies, Inc., an
Indiana corporation ("Anthem"), whose address is 120 Monument Circle,
Indianapolis, Indiana 46204-4903.
Anthem is an Indianapolis-based mutual insurance company and leading
provider of health insurance and managed health care services in the
midwest states of Indiana, Kentucky and Ohio. Acordia is a majority-owned
subsidiary of Anthem engaged in insurance brokerage operations. The
balance of the ownership of Acordia is publicly held.
Neither Anthem nor, to its knowledge, any executive officer, director or
controlling person of Anthem has, during the last 5 years, been convicted
in any criminal proceeding, excluding traffic violations or similar
misdemeanors.
Neither Anthem nor, to its knowledge, any executive officer, director or
controlling person of Anthem has, during the last 5 years, been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which it was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Prior to the initial public offering of the Common Stock of Acordia,
Acordia was a wholly-owned subsidiary of Anthem. In October 1992, Acordia
consummated an initial public offering of its Common Stock. Immediately
after such offering, Anthem owned 63.3% of the outstanding shares of
Acordia Common Stock. At that time, Anthem filed a Schedule 13G reporting
its beneficial ownership of Acordia Common Stock. Pursuant to a publicly
announced stock repurchase program undertaken by Anthem in compliance with
the requirements of Rule 10(b)-18, Anthem has made periodic acquisitions
of Acordia's Common Stock. Such acquisitions have now exceeded two percent
(2%) of such class. The Common Shares of Acordia purchased by Anthem were
purchased by a broker on behalf of Anthem using the working capital of
Anthem. Anthem has suspended the purchase of Acordia stock under this
program while it completes the review and analysis described at Item 4. In
addition, the percentage of shares of Acordia Common Stock owned by Anthem
increased in November, 1996, as a result of a significant repurchase by
Acordia of its Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended as follows: Anthem has informed Acordia's Board
of Directors that it is undertaking a strategic review, which includes an
analysis of its business relationship with and its investment in Acordia.
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Anthem has retained Credit Suisse First Boston to assist it in this
analysis. No decision has as yet been made by Anthem as to what, if any,
changes should be made with respect to its business relationship with and
investment in Acordia. As part of this process, Anthem has asked Credit
Suisse First Boston to explore the possible sale of Acordia's property and
casualty brokerage business and the possible reorganization of Acordia's
health business. Further information is incorporated by reference to the
press release of Acordia, Inc. dated February 6, 1997 attached hereto as
Exhibit 99.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b). The beneficial ownership of Anthem is set forth below. Anthem
has sole voting and dispositive power with respect to all of the
shares indicated below.
NUMBER PERCENT
OF SHARES OF CLASS
----------- ----------
Anthem 8,687,068 66.8%
(c) During October 1996, Anthem disposed of 3,200 Common Shares of Acordia
pursuant to an award of restricted stock under the Associated Acordia
Stock Plan.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale
of, such securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit 99 Press Release of Acordia, Inc. dated February 6, 1997.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ PATRICK M. SHERIDAN
_________________________________________
Patrick M. Sheridan, Executive Vice President
and Chief Financial Officer
Dated: February 6, 1997
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Exhibit 99
NEWS RELEASE
Acordia, Inc.
120 Monument Circle
Indianapolis, IN 46204
ACORDIA ANNOUNCES FOURTH QUARTER EARNINGS AND
INITIATES STRATEGIC REVIEW
INDIANAPOLIS--Acordia, Inc. (NYSE: ACO) reported financial results for the
fourth quarter and year ended December 31, 1996.
In the fourth quarter of 1996, revenues increased 13 percent to $170,951,000
compared to $151,934,000 for the fourth quarter in 1995. Operating income
increased 8 percent to $23,901,000 compared to $22,157,000 in the fourth quarter
of 1995. Net income increased 19 percent to $8,870,000 ($0.64 per share) from
$7,443,000 ($0.52 per share) in the same period in 1995. Results for the fourth
quarter of 1996 include a gain, net of taxes, of $799,000 ($0.06 per share)
related to the sale of assets.
For the year ended December 31, 1996, revenues increased 19 percent to
$660,950,000 compared to $555,064,000 in 1995. Operating income increased 17
percent to $87,928,000 compared to $75,400,000 for the same period last year.
Net income increased 27 percent to $29,888,000 ($2.09 per share) from
$23,582,000 ($1.64 per share) in 1995. Results for the year include gains, net
of taxes, of $1,527,000 ($0.11 per share) related to the sale of assets.
Acordia reported that its health-related operations, which primarily result from
its strategic relationship with Anthem Insurance Companies, Inc., its majority
stockholder, contributed revenues of $326,000,000 for the year ended December
31, 1996. When compared to 1995, the health-related operations revenues
increased 19.7 percent, primarily due to Anthem's merger with Community Mutual
and the assumption of the administration operation for Anthem's Indiana HMO.
The brokerage operations total revenues for the year ended December 31, 1996
were $335,000,000, an 18 percent increase over 1995.
Frank C. Witthun, President and Chief Executive Officer of Acordia stated, "The
driver for growth in our health-related operations has been our work for Anthem.
We are currently projecting that revenues from Acordia's health-related
operations will be flat to slightly down when compared to 1996. However, we do
not anticipate a material effect on Acordia's operating profit derived from
those operations." With regards to the brokerage operations, Witthun stated, "We
are very pleased with our results from the brokerage operations. While the
overall market continues to be intensely competitive, our focus on the middle
market is proving to be successful."
The Board of Directors of Acordia also announced that its review of the 1997
business plan has led to a decision to undertake a strategic review to assess
the changes occurring in the health care industry and the potential implication
of those changes on Acordia's relationship with Anthem. Acordia's Board has been
informed by Anthem that Anthem is similarly undertaking its own strategic
review, which includes an analysis of its business relationship with and
investment in Acordia. Anthem further informed Acordia that Anthem has retained
Credit Suisse First Boston to assist Anthem in this analysis.
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The Acordia Board has created a special committee made up of all of the
independent members of the Board who are unaffiliated with Anthem or Acordia
management to evaluate any proposals made by or involving Anthem. The special
committee has been empowered to retain such financial or other advisors as are
necessary to assist it in that responsibility. John C. Crane, Chairman of
Acordia's Audit and Finance Committee, will chair the special committee.
Acordia, through the special committee and management, has agreed to cooperate
with Anthem and its advisors.
Anthem has informed Acordia that no decision has as yet been made by Anthem as
to what, if any, changes it believes should be made with respect to its business
relationship with and investment in Acordia. As part of the reevaluation
process, Credit Suisse First Boston has been asked to explore the possible sale
of Acordia's property and casualty brokerage business and the possible
reorganization of Acordia's health business.
In commenting upon Anthem's strategic evaluation, L. Ben Lytle, President and
Chief Executive Officer of Anthem, stated, "Acordia and Anthem have been looking
at ways to reduce the administrative and marketing expense portion of the total
health care premium dollar in light of the intense competition and changes
occurring in the health care industry. Anthem has also been redefining its
strategic direction to focus on its health care mission, in line with its
assessment of the opportunities presented by the changing dynamics of the
industry, and has been divesting its interests in other lines of business. In
this context, Anthem has undertaken a strategic review, which includes an
analysis of its relationship with Acordia. We are extremely proud of the
brokerage business which Acordia has built. Historically, it has financially
outperformed its competitors. However, we have determined, preliminarily, that
the property and casualty brokerage business and the structure of the current
business relationship between Anthem and Acordia may no longer be consistent
with Anthem's mission. Therefore, we believe that in light of the brokerage
industry consolidation that now may be an opportune time to capitalize on the
value of Acordia's brokerage business."
Frank C. Witthun also stated, "Acordia is well aware of intensifying competitive
pressures in the health care industry and of Anthem's need to reduce the
administrative and marketing cost associated with its health care business.
Because approximately 44 percent of Acordia's 1996 revenues were derived from
the sale and servicing of Anthem life and health insurance products, it is
inevitable that industry forces affecting Anthem will also impact Acordia. We
are working closely with Anthem so that each company may develop a plan which
accomplishes each of our strategic objectives and delivers shareholder value."
Acordia, the seventh largest insurance brokerage firm in the United States and
the world, is a nationwide network of companies that provide insurance broking,
managed health care and consulting services. Anthem is an Indianapolis-based
mutual insurance company and leading provider of health insurance and managed
health care services in Indiana, Kentucky and Ohio, and has pending merger
agreements covering the Blue Cross and Blue Shield Plans in New Jersey, Delaware
and Connecticut.
Certain statements herein are not historical facts and are forward looking. Such
statements involve a number of risks and uncertainties. While the statements
represent Acordia's current judgment as to the near term future of its business,
such risks and uncertainties could cause actual results to differ materially
from the above statements. Factors which could cause actual results to differ
are set forth in Acordia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
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MEDIA Inquiries: INVESTOR RELATIONS Inquiries:
Don Stengele Keith A. Maib
317-488-6255 317-488-6561
(Note: Consolidated Statements of Income of Acordia, Inc. distributed with the
release are omitted.)
