Fitch Ratings cut the issuer default rating on Cigna Corp., but said the outlook has improved for the health insurer which has major operations in Bloomfield.
Fitch lowered its issuer default rating by one notch, to “BBB+” from “A-,” which is still investment grade. In making the downgrade, the agency pointed to Cigna’s large losses from its runoff reinsurance businesses in 2008, which reduced the company’s equity and financial flexibility.
However, Fitch raised the Philadelphia-based insurer’s outlook to “stable” from “negative.” Fitch expects good earnings from Cigna this year, and noted that Cigna plans to get more cash and strengthen the financial position of its subsidiaries.
The company took a loss in 2008 because the weak market dragged down results from the runoff reinsurance businesses. Those units are intended to provide a steady return to customers, and Cigna’s liabilities increased when market returns are poor. (AP)
