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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
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CIGNA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8323 06-1059331
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(215) 761-1000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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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
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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
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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.
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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.
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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.
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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
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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.
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CIGNA CORPORATION
COMPARATIVE SUMMARY OF FINANCIAL RESULTS
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
[CIGNA LOGO]
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
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
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Total $ 4,753 $ 4,538 $ 9,507 $ 9,069
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OPERATING INCOME (LOSS) BY SEGMENT*
Employee Life and Health Benefits:
Indemnity $ 79 $ 80 $ 126 $ 140
HMOs 50 50 107 109
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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)
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Total Property and Casualty (12) (67) (31) (161)
Other Operations (19) (24) (38) (23)
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Total $ 189 $ 120 $ 335 $ 220
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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)
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Total Property and Casualty (10) (67) 16 (147)
Other Operations (21) (24) (26) (29)
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Total $ 205 $ 135 $ 495 $ 249
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SHAREHOLDERS' EQUITY at June 30 $ 6,829 $ 5,850
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WEIGHTED AVERAGE SHARES
OUTSTANDING (thousands) 72,616 72,398 72,529 72,299
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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
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Net income $ 2.82 $ 1.86 $ 6.82 $ 3.44
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SHAREHOLDERS' EQUITY PER SHARE AT JUNE 30 $ 94.16 $ 80.98
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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%
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Combined ratio 116.4% 122.2% 117.7% 126.8%
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Combined after policyholders' dividends 118.2% 123.1% 119.1% 127.8%
===================================================================================================================
Pre-tax catastrophe losses $ 35 $ 5 $ 51 $ 135
===================================================================================================================
</TABLE>
* Operating income is defined as net income excluding after-tax realized
investment results.
