Executives at Cigna Corp. (NYSE:CI) did not mention the topic of health insurance exchanges during the company’s earnings call for the fourth quarter of 2012.
Instead, the executives emphasized that Cigna is focusing on health insurance markets outside the United States and government plan programs inside the United States.
The executives also had kind words for the company’s disability and life unit.
When an analyst asked whether Cigna would consider selling the unit, David Cordani, Cigna’s president, said the disability insurance business has beeen a “very well-performing block of business for us.”
“These current market conditions are challenging for that line of business,” Cordani said.
The “low-wage growth environment, the unemployment environment and the sustained low interest rate environment” have all caused problems for the unit lately, Cordani said.
“We recognize that it is not growing,” Cordani said.
But, even today, “we’ve been able to deliver very good value propositions for our clients and customers,” Cordani said. “We continue to be very pleased with the business.”
Cigna believes disability insurance revenue and profits will start increasing at an attractive rate in the intermediate term, Cordani said.
Cigna as a whole is reporting $406 million in net income for the latest quarter on $7.6 billion in revenue, up from $273 million in net income on $5.4 billion in revenue for the fourth quarter of 2011.
The company ended the quarter providing or administering health coverage for 14 million people, up 11 percent from the total recorded a year earlier.
But the company provided insured coverage for only 1.9 million people in the United States, about as many as it was insuring a year earlier.
Enrollment in Medicare and Medicaid plans increased to 449,000, from 44,000, because of an acquisition.
Enrollment in health plans outside the United States increased 28 percent, to 744,000.
Cigna is calling its health insurance unit the “Global Health Care” segment.
Meanwhile, in spite of the challenges facing the disability insurance unit, Cigna’s disability insurance premium and fee revenue increased to $377 million, from $306 million.
During the conference call, Cordani described the U.S. commercial health insurance market as being “appropriately competitive.”
“At a macro level, I see no change in overall market conditions,” Cordani said.
Employers do seem to be interested in plans that give them information they can use to try to improve plan members’ health and hold down claims, Cordani said.
Executives at other health insurers have talked the recent flu outbreak having a noticeable effect on medical claims.
Cigna executives said they, too, had noticed an increase in flu claims, but they did not give an estimate of the magnitude of the increase.
Cigna is estimating that overall medical costs might rise 6 percent to 7 percent this year, up from 5.5 percent in 2012, in part because the flu claims have led the company to take a somewhat cautious approach to predicting the medical cost trend, Cordani said.