Cigna Reports Strong Full Year 2012 Results, Expects Continued Positive Momentum for 2013

Cigna Reports Strong Full Year 2012 Results, Expects Continued Positive Momentum for 2013

• Consolidated revenues for full year 2012 increased 33% to $29.1 billion.

• Adjusted income from operations¹for full year 2012 was $1.73 billion, or $5.99 per share, which represents per share growth of 21% over 2011. Shareholders' net income¹for full year 2012 was $1.62 billion, or $5.61 per share.

• Cigna's global medical customer base grew by 1.4 million people during 2012, reflecting strong growth across our Commercial and Government businesses, including contributions from the HealthSpring acquisition.

• The Company increased its outlook for full year 2013 consolidated adjusted income from operations^1,3to be in the range of $1.7 billion to $1.83 billion, or $5.85 to $6.30 per share.

BLOOMFIELD, Conn.--(BUSINESS WIRE)-- Cigna Corporation (NYS: CI) today reported full year 2012 consolidated revenues of $29.1 billion, an increase of 33% over 2011. Revenues reflect growth in premiums and fees of 38% from ongoing operations, primarily driven by contributions from the HealthSpring acquisition and continued organic growth in targeted customer segments.

"Cigna's operating performance in 2012 was strong, driven by effective execution of our strategy and a consistent focus on delivering value for our customers," said David M. Cordani, President and Chief Executive Officer. "This focus on our global customers and the disciplined management of our differentiated businesses continues to drive our growth and positions Cigna well for attractive performance in 2013 and beyond."

Cigna's adjusted income from operations¹ for full year 2012 was $1.73 billion, or $5.99 per share, compared with $1.36 billion, or $4.96 per share, for full year 2011 which represents per share growth of 21% over 2011. For the fourth quarter of 2012, adjusted income from operations¹ was $452 million, or $1.57 per share, compared to $293 million, or $1.05 per share, for the fourth quarter of 2011.

Cigna reported full year 2012 shareholders' net income¹ of $1.62 billion, or $5.61 per share, compared with $1.26 billion, or $4.59 per share, for full year 2011. Shareholders' net income¹ included income of $29 million, or $0.10 per share, in 2012 and losses of $135 million, or $0.49 per share, in 2011 related to the Guaranteed Minimum Income Benefits (GMIB)^2,5 business within our Run-off Reinsurance segment. Shareholders' net income¹ also included special items⁴ which resulted in losses of $171 million, or $0.59 per share, in 2012 compared to losses of $7 million, or $0.03 per share, in 2011.

Cigna also reported fourth quarter 2012 shareholders' net income¹ of $406 million, or $1.41 per share, compared with $273 million, or $0.98 per share, for the fourth quarter of 2011. Shareholders' net income¹ included income of $7 million, or $0.02 per share, in the fourth quarter of 2012 and income of $7 million, or $0.03 per share, in the same period of 2011 related to the Run-off GMIB^2,5 business. Shareholders' net income¹ in the fourth quarter of 2012 also included special items⁴ which resulted in losses of $68 million, or $0.24 per share, related to litigation matters, compared to losses of $31 million, or $0.11 per share, in the fourth quarter of 2011.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results anda reconciliation of adjusted income from operations¹ to shareholders' net income¹ (dollars in millions, except per share amounts; customers in thousands):

• Cash and short term investments at the parent company were approximately $700 million at December 31, 2012 and $3.8 billion at December 31, 2011. The 2011 balance included amounts held at year-end to fund the HealthSpring acquisition that closed on January 31, 2012.

• The Company repurchased⁶ approximately 4.4 million shares of stock for approximately $210 million in 2012.

• Effective in the fourth quarter of 2012, Cigna realigned its businesses to better leverage distribution and service capabilities for the benefit of our global clients and customers, which resulted in a change to Cigna's external reporting segments. Results for all periods presented are now aggregated based on the nature of the products and services delivered, rather than the geographies in which we operate.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 2 for a reconciliation of adjusted income (loss) from operations¹ to segment earnings (loss)¹.

Global Health Care

This segment includes Cigna's Commercial and Government businesses which deliver medical and specialty health care products and services provided to clients and customers 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. The Global Health Care segment includes the business results previously reported in the Health Care segment and Cigna's international health care businesses, primarily consisting of the expatriate benefits business, which was previously included in the former International segment.

Financial Results (dollars in millions, customers in thousands):

• Overall, Global Health Care results reflect our strategic expansion into the Seniors market through our acquisition of HealthSpring and growth in our targeted customer segments.

• Fourth quarter premiums and fees increased 48% relative to fourth quarter 2011, due to the contributions from the HealthSpring acquisition, organic business growth, rate increases, and increased specialty penetration, which reflects a continued shift by clients to our Administrative Services Only ("ASO") solutions.

• Fourth quarter 2012 adjusted income from operations¹ reflects continued growth in targeted medical and specialty businesses, favorable medical costs and continued operating expense leverage, while continuing to make strategic investments to support future growth.

• Third quarter 2012 segment margins⁷ are higher than fourth quarter 2012 and 2011 primarily as a result of favorable pharmacy results and medical costs.

• Global Health Care medical claims payable⁹ was approximately $1.61 billion at December 31, 2012 and $1.06 billion at December 31, 2011, including international health care. The increase in the December 31, 2012 balance is primarily attributable to the HealthSpring acquisition.

Global Supplemental Benefits

This segment includes Cigna's supplemental health, life, and accident insurance, including Medicare supplement coverage, in the U.S. and in foreign markets, primarily in Asia. These results, along with the international health care results, were previously reported in the former International segment.

Financial Results (dollars in millions, policies in thousands):

• Fourth quarter premium and fees grew 44% relative to fourth quarter 2011, reflecting recent acquisitions and attractive customer retention and business growth, primarily in Korea.

• Fourth quarter 2012 adjusted income from operations¹ reflects the impact of strong customer retention and business growth and favorable claim experience, particularly in our Korean and U.S. operations.

• Fourth quarter 2011 segment margins⁷ reflect increased strategic investments in product and geographic expansion initiatives, costs to streamline operations, and the unfavorable impact of changes in foreign tax law.

• The sequential increase in policies as of December 31, 2012 reflects the acquisitions of the Turkey joint venture and Great American Supplemental Benefits.

Group Disability and Life

This segment includes Cigna's group disability, life, and accident insurance operations, including certain disability and life insurance business previously reported in the former Health Care segment.

Financial Results (dollars in millions):

• Adjusted income from operations¹ and segment margins⁷ for the fourth quarter of 2012 reflect the effect of unfavorable claims experience in the disability business and favorable life claims experience.

• Adjusted income from operations¹ for the third quarter of 2012 includes a $5 million after-tax favorable impact related to reserve studies.

Other Segments

Adjusted income (loss) from operations¹ for Cigna's remaining operations is presented below (dollars in millions):

• During the first quarter of 2013, Cigna entered into a definitive agreement with Berkshire Hathaway to exit the Run-off Reinsurance businesses. Cigna will fund the transaction with an incremental $100 million of parent company cash, approximately $1.8 billion of investment assets supporting the run-off businesses, and an estimated $300 million tax benefit associated with the transaction. As a result of this transaction, Cigna expects to record an after-tax charge of $500 million as a special item in the first quarter of 2013.

OUTLOOK

• Cigna increased its outlook for full year 2013 consolidated adjusted income from operations^1,3 to be in the range of $1.70 billion to $1.83 billion, or $5.85 to $6.30 per share.