NU Online News Service, Aug. 1, 10:14 a.m. – CIGNA Corp., Philadelphia, is reporting $252 million in net income for the second quarter on $4.7 billion in revenue, compared with $161 million in net income on $5 billion in revenue for the second quarter of 2000.
Operating income, which excludes $50 million in losses on investments sold during the quarter, increased to $284 million, from $152 million.
Rising medical costs hurt the major medical managed care results, but demand for indemnity health insurance and specialty health products was strong, according to CIGNA.
Revenue was down because the company shut down some Medicare health maintenance organization and started reporting results for its Japanese operations separately, the company says.
The CIGNA health care unit, which also sells life insurance and disability insurance, earned $204 million in after-tax operating income for the second quarter on $3.7 billion in revenue and 14.3 million members, up from $181 million on $3.6 billion in revenue and 14.1 million in members.
The average CIGNA major medical member generated $15 in operating profits for the quarter and $252 in revenue, compared with $13 in operating profits and $255 revenue for the second quarter of 2000.
The retirement services unit is reporting $53 million in after-tax operating operating income on $404 million in revenue, down from $64 million on $501 million in revenue.
Retirement services income fell as a result of the recent stock market slump, which depressed asset totals, and the recent cuts in interest rates, which reduced the “spread”?the gap between what CIGNA pays retirement services account holders and the rates it can earn on its own investments.