Cigna 2Q profit climbs, enrollment falls

Health insurer Cigna Corp. said today its second-quarter profit jumped 60 percent on a more favorable interest rate and other items, but enrollment fell 7 percent.
JUL 30, 2009
By  Bloomberg
Health insurer Cigna Corp. said today its second-quarter profit jumped 60 percent on a more favorable interest rate and other items, but enrollment fell 7 percent. The Philadelphia-based company's shares tumbled 6.6 percent, or $1.89, to $26.58 in pre-market trading. Cigna said it earned $435 million, or $1.58 per share, up from $272 million, or 96 cents per share. Revenue fell 8 percent, to $4.49 billion from $4.86 billion. Adjusted profit from operations grew 3 percent to $313 million, or $1.14 per share. Analysts expected a profit of 96 cents per share and $4.8 billion in revenue, according to Thomson Reuters. Cigna said 40 cents per share of its profit came from its guaranteed minimum income benefits business, which took a large charge in the first half of 2008 and had been a drag on past earnings. Cigna discontinued that business and its variable annuity death benefits in 2000. The insurer operates both in run-off mode, meaning it seeks no new business for them. Declines in equity markets had led to charges from both businesses in recent quarters. The insurer also was helped in the second quarter by a benefit of 11 cents per share tied to its decision to freeze its pension plan. Total enrollment at the end of the quarter was 11.2 million, down from 12.1 million in the same quarter last year. Cigna said its premiums and fees — the largest portion of its revenue — fell due to that decline. The company raised its full-year adjusted profit outlook, to $3.80 to $4 per share. That tops analysts' profit expectations of $3.71 per share. In June, Cigna had projected earnings of $3.70 to $3.90 per share. Cigna now expects a larger membership decline, however. It forecast a 5 to 5.5 percent decrease in enrollment, compared with an earlier forecast of a decline of 3 to 4 percent.

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.