Fitch Ratings has revised its rating outlook for Cigna Corp., which has major operations in Bloomfield, from stable to negative and affirmed all outstanding ratings.
Fitch said the outlook revision to negative follows the health insurer’s 53 percent drop in third quarter earnings and related announcements. While several aspects of Cigna’s operations are going well, there are many near-term challenges and uncertainties, including:
– Operating losses and capital requirements related to the run-off reinsurance business driven primarily by variable annuity death benefit guarantees, which will contribute to a modest weakening of Cigna’s operating capital over the near-term;
– Uncertain funding needs for Cigna’s pension plan; and
– An elongated period relative to expectations in which financial leverage will remain above management’s target of 30 percent debt-to-capital.
