Managed care company Cigna, with operations in Bloomfield, said Thursday it posted a fourth-quarter profit, as interest rates and improved equity markets once again erased the earnings drag from a couple of discontinued businesses.
The Philadelphia insurer said it earned $60 million from its guaranteed minimum income benefits in the fourth quarter of 2009, after losing a total of $408 million, or $1.51 per share, in the same quarter last year from that business and its variable annuity death benefits.
Cigna discontinued both segments in 2000 and operates them in run-off mode, meaning it seeks no new business. Those businesses had hurt the company’s performance in 2008 because its liabilities for them increased when the market turned bad.
Cigna operates health care, group disability and life segments in the U.S. It also sells individual insurance in several countries and operates an expatriate business that covers people living outside their home countries.
The insurer earned $330 million, or $1.19 per share, in the three months that ended in December. That compares with a loss of $209 million, or 77 cents per share, in the 2008 quarter.
Revenue fell 4 percent to $4.64 billion from $4.82 billion.
Excluding one-time items and one of its discontinued businesses, Cigna said it earned $1.03 per share.
Analysts polled by Thomson Reuters forecast a profit of 96 cents per share on $4.6 billion in revenue. But comparing these averages to Cigna’s adjusted results can be difficult because the insurer includes results from a discontinued business. Many analysts’ projections do not.
Premium revenue fell 3 percent to $2.81 billion in the company’s largest segment, its health care division, mainly due to declining enrollment that was partially offset by rate increases, the company said.
Medical membership fell 5.5 percent to 11 million compared to the final quarter of 2008. But enrollment fell less than 1 percent from the third to fourth quarters of last year. Competitors WellPoint Inc. and UnitedHealth Group Inc. also reported enrollment drops that slowed over the final two quarters of 2009, but both said they expect continued losses into 2010. (AP)
