About CONNECTICUT GENERAL CORPORATION

With a significant position in the US health insurance market, CIGNA covers some 15 million Americans with its various medical plans. The firm's offerings include PPO, HMO, point-of-service (POS), indemnity, and consumer-directed products, as well as specialty coverage in the form of dental, vision, pharmacy, and behavioral health plans. It also sells group accident, life, and disability insurance. Customers include employers, government entities, unions, Medicare recipients, and other groups and individuals in North America. Internationally, CIGNA sells life, accident, and health insurance in parts of Europe and Asia, and provides health coverage to expatriate employees of multinational companies. In 2017 Cigna's planned merger with rival Anthem was terminated.

Operations

CIGNA's subsidiaries include Connecticut General Life Insurance, Cigna Health and Life Insurance, Life Insurance Company of North America, and Cigna Life Insurance Company of New York.

CIGNA's largest segment is composed of its global health care operations, which account for nearly 80% of revenues and provide full health plan benefits for multinational, local, and organizational groups in North America and abroad. The division also provides behavioral health, employee assistance, pharmacy, and utilization review services to employer groups and benefit administrators.

CIGNA's disability and life insurance segment, which accounts for more than 10% of sales, offers long- and short-term disability, group life, and accident insurance, among other products. The company covers more than 7.5 million lives with its group life insurance policies and more than 8 million individuals with its group disability policies.

A third segment, global supplemental benefits, provides supplemental health, accident, and life policies in the US and about 30 other countries.

Other operations include corporate-owned life insurance, run-off reinsurance business, and run-off settlement annuity business. (These businesses service existing policies but don't issue new policies.)

The company has more than 170 Collaborative Accountable Care Organization arrangements in 30 states covering 1.9 million customers. Its global network includes more than 2 million partnerships with health care providers and facilities.

Geographic Reach

In addition its domestic operations -- which account for the majority of revenues and cover all 50 US states plus Washington, DC; Canada; Puerto Rico; and the Virgin Islands -- CIGNA sells supplemental life, accident, and health insurance to millions of members in international markets (about 30 countries). South Korea is the firm's largest foreign market. CIGNA is also one of the world's largest providers of expatriate health insurance, which covers the overseas employees of multinational corporations. In China, Turkey, and India, CIGNA operates through joint ventures.

In all, CIGNA operates in about 15 countries in North America, Europe, the Middle East, and the Asia/Pacific region.

The company's international properties include about 1.9 million sq. ft. in Belgium, Canada, China, Hong Kong, India, Indonesia, Kenya, Malaysia, New Zealand, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, and the UK.

Sales and Marketing

CIGNA does much of its health plan business with large employer groups, mainly through direct sales representatives and independent consultants. The company is working to expand its customer base to include more select (50 to 250 employees) and midsized (250 to 5,000 employees) businesses, government entities, and individuals. At the end of 2015, its global health care sales force consisted of more than 1,400 representatives in more than 130 field locations.

The disability and life segment markets policies to employer groups and other professional associations through a network of brokers and consultants, while international health and life policy and supplemental benefit sales are conducted via independent distributors. Some supplemental products are marketed via direct telemarketing efforts.

The company's supplemental health, life, and accident policies sold abroad are generally marketed through distribution partnerships. These products are typically sold through direct marketing efforts such as telemarketing, television ads, online advertising, and in-branch bancassurance (partnerships with banks).

Financial Performance

CIGNA has maintained a healthy balance between growth and cost-control efforts in recent years, leading to steady increases in revenues. In 2016 revenues rose 5% to $39.7 billion as premiums, fees, and mail-order pharmacy revenues all increased. Global health care, global supplemental benefits, and group disability and life all saw growth that year. Likewise, the middle market, select, and international market segments all had higher revenues.

The company has seen fluctuating profits over the past five years. In 2016, lower adjusted income from operations plus an increase in benefits and expenses (primarily merger-related and risk corridor allowance costs) caused net income to decline 11% to $1.9 billion.

After dropping in 2013, cash flow from operations has been increasing; it rose 48% to $4 billion in 2016. A positive change in premiums accounts receivable plus lower net realized investment losses drove that figure higher.

Strategy

CIGNA's overall growth strategy is to "Go Deep, Go Global, and Go Individual" by offering medical, disability, life and accident, and dental coverage, as well as related products and services. In addition to providing health insurance, the group is increasingly focused on wellness programs to prevent illness and improve well-being. These efforts, as well as its push to make health care more affordable, accessible, and individualized, are intended to establish a more sustainable health care system.

While it continues to pursue new corporate accounts, CIGNA is trying to grow its domestic health care segment by offering new and innovative products for individuals. For instance, the company is launching trendy consumer-directed programs such as low-deductable plans with health savings accounts (CIGNA Choice Fund), incentive programs, health risk assessments, and online tools (such as Choicelinx and HealthEview) for comparing coverage options and making sound health care decisions. CIGNA also collaborates with health care providers and regional health plans to lower medical costs and improve access to quality care. Additionally, CIGNA is focused on new distribution marketplaces such as public and private exchanges and new buying segments and service expansions.

CIGNA works to mitigate rising health care costs through means such as entering favorable reimbursement contracts with providers and enhancing operating and administrative efficiencies. Health care reform measures and CMS reimbursement cuts have also prompted CIGNA to exit some of its health plan market segments, while pursuing growth in areas it perceives to be more profitable under new laws. For instance, the company has recently withdrawn its small group (2 to 50 employees) offerings in certain states.

Internationally, the company is working to expand its geographic footprint, especially in emerging markets.

Mergers and Acquisitions

In 2015 CIGNA bought New Jersey-based QualCare, an insurer focusing on self-funded insurance plans. The combined company is among New Jersey's largest insurance providers; the merger also allows for QualCare to expand its business model nationally.

Also that year, CIGNA agreed to be acquired by competitor Anthem for some $48 billion. The deal would have created a health insurance giant serving more than 53 million people and generating about $115 billion in revenue. The companies anticipated that the acquisition would save money (nearly $2 billion in savings was expected) and better position the combined entity to take advantage of opportunities created by the Affordable Care Act. However, in 2017, Cigna terminated the merger, which was then blocked by a federal judge. Anthem vowed to fight for the deal, but ultimately scrapped the whole plan.

In mid-2017 CIGNA acquired Zurich Insurance Middle East, enabling it to expand its existing operations in the region. With the purchase, CIGNA has operations in the United Arab Emirates, Lebanon, Kuwait, and Oman.

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CONNECTICUT GENERAL CORPORATION

900 Cottage Grove Rd
Bloomfield, CT 06002-2920
Phone: 1 (860) 226-6000
Fax: 1 (860) 726-8854

Stats

  • Employer Type: Public
  • Chief Technology Officer: David Burliss
  • Ceo: David M Cordani
  • Executive Managing Director: Karen McGrane
  • Employees: 24,260

Major Office Locations

  • Bloomfield, CT