-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, PGW5dbEDOBUdiGzTStPBucwnW2g/sESiftTZtQFybaSPKnJUSynOQL5RV1LxgTjL XXPRLvB0BL1CP/upMFy5kQ== 0000893220-95-000497.txt : 19950803 0000893220-95-000497.hdr.sgml : 19950803 ACCESSION NUMBER: 0000893220-95-000497 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950801 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950802 SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 061059331 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08323 FILM NUMBER: 95558366 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PL 1650 MARKET ST STREET 2: P O BOX 7716 CITY: PHILADELPHIA STATE: PA ZIP: 19192-1550 BUSINESS PHONE: 2157611000 8-K 1 FORM 8-K DATED AUGUST 1, 1995 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) AUGUST 1, 1995 -------------- CIGNA CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-8323 06-1059331 -------- ------ ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) ONE LIBERTY PLACE, 1650 MARKET STREET, P.O. BOX 7716 PHILADELPHIA, PENNSYLVANIA 19192-1550 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 761-1000 -------------- NOT APPLICABLE ------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events. On August 1, 1995, the registrant issued a news release, a copy of which is filed as Exhibit 20 hereto and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) The exhibit accompanying this report is listed in the Index to Exhibits below. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CIGNA CORPORATION Date: August 1, 1995 By: /s/ Gary A. Swords ------------------------- Gary A. Swords Vice President and Chief Accounting Officer Index to Exhibits Number Description Method of Filing 20 CIGNA Corporation Filed herewith. news release dated August 1, 1995 -2- EX-20 2 CIGNA NEWS RELEASE 1 EXHIBIT 20 [CIGNA NEWS RELEASE LETTERHEAD] For Release: Contact: IMMEDIATE ROBERT W. SULLIVAN, FINANCIAL RELATIONS - (215) 761-6130 MICHAEL J. MONROE, MEDIA RELATIONS - (215) 761-6133 CIGNA'S SECOND QUARTER 1995 RESULTS PHILADELPHIA, AUGUST 1, 1995 -- CIGNA Corporation (NYSE:CI) today reported second quarter 1995 operating income* of $189 million, or $2.60 per share, versus $120 million, or $1.65 per share, reported in the second quarter of 1994. For the first half of 1995, operating income was $335 million, or $4.62 per share, compared with $220 million or $3.04 per share a year ago. "Overall earnings in the second quarter and first half of 1995 showed strong improvement, largely reflecting continued progress in Property and Casualty. In an effort to further strengthen future operating results, CIGNA is implementing cost reduction actions in the Domestic Property and Casualty operations that could result in a pre-tax charge to earnings in the third quarter by as much as $75 million and reduce annual expenses by a comparable amount," said Wilson H. Taylor, CIGNA's Chief Executive Officer. * Operating income is defined as net income excluding realized investment gains and losses. 2 - 2 - SEGMENT RESULTS: EMPLOYEE LIFE AND HEALTH BENEFITS This segment, which includes CIGNA's HMO and indemnity operations, had operating income of $129 million in the second quarter of 1995. This compares with operating income of $130 million in the second quarter of 1994. For the first six months of 1995, operating income was $233 million, compared with $249 million in 1994. Second quarter earnings were somewhat below expectations, primarily reflecting a continuation of cost pressures. Efforts to reduce healthcare medical and operating costs are underway. HMO medical membership grew by 324,000 covered lives or 9% since year end 1994 and by 536,000 covered lives, or 16% since June 30, 1994. EMPLOYEE RETIREMENT AND SAVINGS BENEFITS This segment, which operates in the defined contribution and defined benefit pension markets, had operating income of $46 million in the second quarter of 1995. This compares with operating income of $44 million in the second quarter of 1994. For the first six months of 1995, operating income was $95 million, compared with $92 million in 1994. Assets under management at June 30, 1995 were $36.2 billion, an increase of 9% from $33.4 billion as of June 30, 1994. 3 - 3 - INDIVIDUAL FINANCIAL SERVICES This segment, which includes individual and corporate-owned life insurance; life, accident and health reinsurance; and annuity businesses, had operating income of $45 million in the second quarter of 1995. This compares with operating income of $37 million in the second quarter of 1994. For the first six months of 1995, operating income was $76 million, compared with $63 million in 1994. PROPERTY AND CASUALTY The property and casualty (P&C) segment had an operating loss of $12 million for the second quarter of 1995. This compares with an operating loss of $67 million for the second quarter of 1994. For the first six months of 1995, the operating loss was $31 million, compared with a loss of $161 million in 1994. Excluding asbestos and environmental (A&E) losses, operating income was $44 million in the second quarter of 1995, compared with an operating loss of $35 million for the same period in 1994. The International division had operating income for the second quarter of 1995 of $26 million, compared with a loss of $1 million in 1994, and the Domestic division reported income of $16 million for the second quarter of 1995, compared with a loss of $27 million in 1994. The second quarter and six months of 1995 included pre-tax catastrophe losses of $35 million and $51 million, respectively. This compares with losses of $5 million and $135 million for the respective periods of 1994. The second quarter 1995 catastrophe losses included approximately $30 million for Texas hailstorms. 4 - 4 - Excluding A&E losses, the GAAP combined ratio after policyholders dividends was 109 and 111 for the second quarter and six months of 1995, compared with 118 and 122 for the comparable periods of 1994. The A&E losses in the second quarter of 1995 were $56 million, compared with losses of $32 million in 1994. The second quarter 1995 amount includes a settlement on an asbestos case of about $13 million. For the first six months of 1995, A&E losses were $101 million, compared with $76 million in 1994. CIGNA continues to review the asbestos and environmental reserve issue. This effort is expected to be completed in the third or fourth quarter and the outcome could be material to CIGNA's overall financial condition. OTHER Other Operations, which includes unallocated investment income, expenses and taxes, as well as the results of CIGNA's investment and real estate subsidiaries and settlement annuity business, had an operating loss of $19 million in the second quarter of 1995. This compares with an operating loss of $24 million in the second quarter of 1994. For the first six months of 1995, the operating loss was $38 million, compared with $23 million in 1994. The first six months of 1994 included a $20 million after-tax gain from the sale of a business. NET INCOME Consolidated net income for the quarter was $205 million ($2.82 primary earnings per share), compared with $135 million ($1.86 per share) a year ago. For the first half of 1995, consolidated 5 - 5 - net income was $495 million ($6.82 per share), compared with $249 million ($3.44 per share) a year ago. The 1995 second quarter consolidated net income included after-tax realized investment gains of $16 million ($0.22 per share), compared with gains of $15 million ($0.21 per share) for the same period of 1994. The first half of 1995 consolidated net income included after-tax realized investment gains of $160 million ($2.20 per share) compared with gains of $29 million ($0.40 per share) for the same period of 1994. The significant investment gains in the first half of 1995 reflect the effects of restructuring several portfolios. REVENUES Consolidated revenues for the second quarter of 1995 were $4.8 billion, compared with $4.5 billion for the same period in 1994. For the first six months of 1995, consolidated revenues were $9.5 billion versus $9.1 billion in 1994. ASSETS / SHAREHOLDERS' EQUITY Assets at June 30, 1995 were approximately $92 billion, compared with approximately $86 billion at year-end 1994. Shareholders' equity was $6.8 billion ($94.16 per share) at June 30, 1995, compared with $5.8 billion ($80.46 per share) at December 31, 1994. The increase in Shareholders' equity includes an increase of approximately $680 million in the unrealized appreciation of fixed maturities carried at fair value, due to the downward movement of interest rates. 6 CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts)
[CIGNA LOGO] - ------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 1995 1994 1995 1994 =================================================================================================================== REVENUES Premiums and fees $ 3,514 $ 3,444 $ 6,932 $ 6,810 Net investment income 1,085 968 2,112 1,960 Other revenues 130 103 257 255 Realized investment gains 24 23 206 44 - ------------------------------------------------------------------------------------------------------------------- Total $ 4,753 $ 4,538 $ 9,507 $ 9,069 =================================================================================================================== OPERATING INCOME (LOSS) BY SEGMENT* Employee Life and Health Benefits: Indemnity $ 79 $ 80 $ 126 $ 140 HMOs 50 50 107 109 --------- -------- ---------- ---------- 129 130 233 249 Employee Retirement and Savings Benefits 46 44 95 92 Individual Financial Services 45 37 76 63 Property and Casualty: Operations 44 (35) 70 (85) Asbestos and Environmental Losses (56) (32) (101) (76) --------- -------- ---------- ---------- Total Property and Casualty (12) (67) (31) (161) Other Operations (19) (24) (38) (23) - ------------------------------------------------------------------------------------------------------------------- Total $ 189 $ 120 $ 335 $ 220 =================================================================================================================== NET INCOME (LOSS) BY SEGMENT Employee Life and Health Benefits $ 148 $ 136 $ 333 $ 261 Employee Retirement and Savings Benefits 46 49 97 95 Individual Financial Services 42 41 75 69 Property and Casualty: Operations 46 (35) 117 (71) Asbestos and Environmental Losses (56) (32) (101) (76) --------- -------- ---------- ---------- Total Property and Casualty (10) (67) 16 (147) Other Operations (21) (24) (26) (29) - ------------------------------------------------------------------------------------------------------------------- Total $ 205 $ 135 $ 495 $ 249 =================================================================================================================== SHAREHOLDERS' EQUITY at June 30 $ 6,829 $ 5,850 =================================================================================================================== WEIGHTED AVERAGE SHARES OUTSTANDING (thousands) 72,616 72,398 72,529 72,299 =================================================================================================================== PRIMARY EARNINGS PER SHARE: Operating income* $ 2.60 $ 1.65 $ 4.62 $ 3.04 After-tax realized investment gains 0.22 0.21 2.20 0.40 - ------------------------------------------------------------------------------------------------------------------- Net income $ 2.82 $ 1.86 $ 6.82 $ 3.44 =================================================================================================================== SHAREHOLDERS' EQUITY PER SHARE AT JUNE 30 $ 94.16 $ 80.98 =================================================================================================================== PROPERTY AND CASUALTY STATISTICS (GAAP) Net written premiums $ 933 $ 966 $ 1,778 $ 1,964 Earned premiums $ 980 $ 1,059 $ 1,881 $ 2,060 Underwriting ratios: Loss and loss adjustment expense 79.1% 85.1% 78.0% 89.3% Underwriting expense 37.3% 37.1% 39.7% 37.5% - ------------------------------------------------------------------------------------------------------------------- Combined ratio 116.4% 122.2% 117.7% 126.8% =================================================================================================================== Combined after policyholders' dividends 118.2% 123.1% 119.1% 127.8% =================================================================================================================== Pre-tax catastrophe losses $ 35 $ 5 $ 51 $ 135 ===================================================================================================================
* Operating income is defined as net income excluding after-tax realized investment results. -----END PRIVACY-ENHANCED MESSAGE-----