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CIGNA Reports Lower 4th Quarter Net Income

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NU Online News Service, Feb. 8, 2:14 p.m. – CIGNA Corp., Philadelphia, is reporting $199 million in net income for the fourth quarter of 2001 on $4.9 billion in revenue, down from $277 million in net income on $5.1 billion in revenue for the fourth quarter of 2000.

CIGNA sells employee health, disability and life insurance benefits, retirement services and international health benefits.

Net results for the latest quarter include $96 million in restructuring charges for the benefits operation. They also include $64 million in gains on the sale of a stake in a Japanese life insurance unit and the sale of a life reinsurance unit.

CIGNA is also recording $65 million in investment losses for the quarter. Some of the losses are due to the poor performance of collateralized debt obligations, and some to problems with securities from Enron Corp., Houston, and issuers in Argentina, CIGNA says.

Operating income, which excludes the investment losses and the unusual gains and losses fell to $256 million, from $285 million, the company says.

The health insurance unit provided major medical coverage for 14 million U.S. residents at the end of 2001, about as many as it covered at the end of 2000.

Average revenue per major medical member increased 10%, to $622 on $8.9 billion in premiums and premium equivalents.

Some health insurance analysts have wondered whether the Sept. 11, 2001, attacks would increase interest in employee assistance programs. CIGNA reports its EAP enrollment increased 10%, to 1.2 million, in the fourth quarter.

Net income at the retirement services unit fell to $25 million on $55 billion in assets, from $64 million on $55 billion in assets, and net income at the international benefits unit increased to $46 million on $214 million in premium revenue, from $16 million on $518 million in premium revenue.

Revenue at the international benefits unit was down in part because of the sale of CIGNA’s interest in the Japanese life insurance unit, CIGNA says.


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