CIGNA Reports Lower 2nd Quarter Net Income

By Staff Writer

August 02, 2002 at 08:00 PM

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NU Online News Service, Aug. 2, 11:10 a.m. –CIGNA Corp., Philadelphia, is reporting $214 million in net income for the second quarter on $5 billion in revenue, compared with $252 million in net income on $4.7 billion in revenue for the second quarter of 2001.

Operating results for the latest quarter, which exclude $104 million in losses on investments sold or written off during the quarter, fell to $281 million, from $284 million.

CIGNA now sells group major medical and other employee benefits; employee retirement benefits and investment services; and international employee benefits.

Health: The health benefits unit increased its operating income to $228 million, from $204 million, and ended the quarter providing or administering major medical coverage for 14 million people, about as many people as it covered a year earlier.

The average major medical premium and fee revenue per major medical member increased 10%, to $652.

Retirement: Operating income at the retirement benefits unit increased to $57 million, from $53 million, in spite of the weak economy.

International: Operating income at the international benefits unit fell to $8 million, from $10 million.

Other operations: CIGNA once ran a major life reinsurance business. It sold some of the business, including reinsurance contracts for policies that guaranteed minimum death benefits for variable-annuity contract holders, in 2000.

If the stock market continues to perform poorly for a "sustained period," CIGNA would have to increase reserves for the variable-annuity death benefit reinsurance contracts "in amounts that could be material to CIGNA's financial condition," CIGNA says.

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