PHILADELPHIA, May 05, 2011 - CIGNA Corporation (NYSE: CI) today reported first quarter 2011 results, that included consolidated revenue growth and strong earnings growth from each of our ongoing businesses, reflecting continued effective execution of our strategy.
Consolidated revenues increased 8%, excluding the effect from exiting Medicare IPFFS. Revenues reflect premium and fee increases of 6% in Health Care, 4% in Disability and Life, and 32% in International, driven by continued growth in our targeted customer segments.
CIGNA reported shareholders' net income of $429 million, or $1.57 per share, for the first quarter of 2011, compared with shareholders' net income of $283 million, or $1.02 per share, for the first quarter of 2010. Shareholders' net income for the first quarter of 2011 included a special item which generated income of $0.09 per share.
CIGNA's adjusted income from operations for the first quarter of 2011 was $375 million, or $1.37 per share, compared with $281 million, or $1.01 per share, for the first quarter of 2010. Adjusted income from operations in the quarter included prior year favorable claim development in the Health Care business of $22 million after-tax, or $0.08 per share, compared to $4 million after-tax, or $0.01 per share, in 2010.
"Our first quarter results represent a strong start towards achieving our full year 2011 goals, with good revenue growth and strong earnings contributions from each of our ongoing businesses," said David M. Cordani, President and Chief Executive Officer of CIGNA Corporation. "These results reflect continued effective execution of our strategy for the benefit of our customers, health care partners and shareholders."
This segment includes medical and specialty health care products and services provided on guaranteed cost, retrospectively experience-rated and service-only funding bases. Specialty health care includes behavioral, dental, disease and medical management, stop-loss, and pharmacy-related products and services.
- Overall, Health Care results reflect continued growth in our targeted customer segments and the expected declines in medical membership and premiums and fees due to exits from non-strategic markets, primarily Medicare IPFFS.
- Excluding Medicare IPFFS, first quarter premiums and fees increased approximately 6% relative to first quarter 2010, due to business growth, rate increases and increased specialty penetration.
- First quarter 2011 adjusted segment earnings reflect continued growth in targeted medical and specialty businesses.
- Earnings in the quarter include favorable prior year claim development of approximately $22 million after-tax.
- Health Care medical claims payable were approximately $1,026 million at March 31, 2011 and $1,010 million at December 31, 2010.
Disability and Life
This segment includes CIGNA's group disability, life, and accident insurance operations that are managed separately from the health care business.
- First quarter 2011 Disability and Life results reflect solid revenue growth, including a 9% increase in disability premiums and fees. Adjusted segment earnings benefited from favorable life and accident claims experience.
- First quarter 2011 and 2010 adjusted segment earnings include the favorable after-tax impacts related to reserve studies of $6 million and $10 million, respectively.
This segment includes CIGNA's supplemental health, life, and accident insurance and expatriate benefits businesses operating in select international markets.
- International segment results reflect strong premium and fee growth driven by attractive customer retention and sales in targeted markets within our supplemental Health, Life and Accident and Expatriate Benefits businesses. Results also include contributions to the Expatriate business from Vanbreda International, which was acquired during the third quarter of 2010.
- First quarter 2010 results included a favorable adjustment of $5 million after-tax related to the implementation of a capital management strategy.