NU Online News Service, Feb. 7, 11:42 a.m. – CIGNA Corp., Philadelphia, is reporting $47 million in net income for the fourth quarter of 2002 on $4.7 billion in revenue, compared with $191 million in net income on $4.8 billion in revenue for the fourth quarter of 2001.
Net results for the latest quarter include $95 million in restructuring charges and a $50 million reserve to cover the cost of a proposed settlement to a large class-action lawsuit.
The company recorded $9 million in investment gains for the quarter, in spite of problems with bonds, because of gains on real estate investments, CIGNA says.
CIGNA also notes that it had to shift $638 million in shareholders’ equity to its own pension plan, to cope with a reduction in the value of the plan’s assets caused by the stock market slump and low interest rates.
CIGNA’s products include employee benefits and employee retirement and investment services.
Employee benefits: The benefits unit generated $122 million in operating income for the latest quarter on $9.7 billion in premiums and premium equivalents, compared with $213 million in operating income on $8.8 billion in premium revenue for the comparable quarter in 2001.
The company’s managed care operations ended 2002 providing or administering major medical coverage for 13 million people, about as many people as it covered a year earlier.
Average revenue per major medical member increased 12%, to $744.
Retirement benefits: The retirement benefits unit generated $60 million in operating income for the latest quarter on $54 billion in assets, compared with $56 million in operating income on $56 billion in assets.