Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information [Abstract]

Segment Information [Text Block]

Note23 ― Segment Information

Effective December 31, 2012, Cigna changed its external reporting segments to reflect the Company's realignment of its businesses to better leverage distribution and service delivery capabilities for the benefit of our global clients and customers. Management believes the realignment of its businesses will enable the Company to more effectively address global health services challenges by leveraging best practices across geographies to improve the health, well being and sense of security of the global customers that the Company serves. The changes in the Company's internal financial reporting structure, to support this realignment, took effect on December 31, 2012 and resulted in changes to our external reporting segments. The Company's results are now aggregated based on the nature of the Company's products and services, rather than its geographies.

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The primary segment reporting change is that the two businesses that comprised the former International segment (international health care and supplemental health, life and accident) are now reported as follows:

• substantially all of the international health care business (comprised primarily of the global health benefits business) is now reported with the former Health Care segment and renamed Global Health Care; and
• the supplemental health, life and accident business becomes a separate reporting segment named Global Supplemental Benefits.

As a result of these changes, the financial results of Cigna's businesses are now reported in the following segments:

Global Health Care aggregates the following two operating segments:

• TheCommercial operating segmentincludes both the U.S. commercial and international health care businesses thatoffer insured and self-insured medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services that may be integrated to provide comprehensive global health care benefit programs to employers and their employees, including globally mobile individuals. Cigna, either directly or through its partners, offers some or all of these products and servicesin all 50 states, the District of Columbia, the U.S. Virgin Islands, Canada, Europe, the Middle East, and Asia. Cigna services its globally mobile customers virtually everywhere in the world. These products and services are offered through a variety of funding arrangements such as administrative services only (ASO), guaranteed cost and retrospectively experience rated.
• The Government operating segment offers Medicare Advantage plans to seniors in 13 states and the District of Columbia, Medicare Part D plans in all 50 states and the District of Columbia and Medicaid plans.

Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in the U.S. and foreign markets, primarily in Asia as well as Medicare supplemental coverage following the 2012 acquisition of Great American Supplemental Benefits.

Group Disability and Life represents group disability, life and accident insurance products, including certain disability and life insurance business previously reported in the former Health Care segment.

Run-off Reinsuranceis predominantly comprised of GMDB and GMIB business. On December 31, 2010, the Company essentially exited from its workers' compensation and personal accident reinsurance business by purchasing retrocessional coverage from a Bermuda subsidiary of Enstar Group Limited and transferring the ongoing administration of this business to the reinsurer.

The Company also reports results in two other categories.

Other Operations consist of:

• corporate-owned life insurance (“COLI”);
• deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and

• run-off settlement annuity business.

Corporatereflects amounts not allocated to other segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options and certain corporate overhead expenses such as directors' expenses.

In 2010, the Company began reporting the expense associated with its frozen pension plans in Corporate. Prior periods were not restated as the effect on prior periods was not material.

The Company measures the financial results of its segments using “segment earnings (loss)”, which is defined as shareholders' income (loss) from continuing operations before after-tax realized investment results. The Company determines segment earnings (loss) consistent with accounting policies used in preparing the consolidated financial statements, except that amounts included in Corporate are not allocated to segments. The Company allocates certain other operating expenses, such as systems and other key corporate overhead expenses, on systematic bases. Income taxes are generally computed as if each segment were filing a separate income tax return. The Company does not report total assets by segment since this is not a metric used to allocate resources or evaluate segment performance.

Summarized segment financial information for the years ended December 31 was as follows:

(In millions)	2012		2011		2010
Global Health Care
Premiums and fees:
Medical:
Guaranteed cost (1)	$	4,256	$	4,176	$	3,929
Experience-rated (2)		2,022		1,934		1,823
Stop loss		1,672		1,451		1,287
International health care		1,648		1,344		976
Dental		1,005		894		804
Medicare		4,969		489		1,470
Medicaid		207		-		-
Medicare Part D		1,421		685		615
Other		677		600		543
Total medical		17,877		11,573		11,447
Fees (3)		3,096		2,870		2,687
Total premiums and fees		20,973		14,443		14,134
Mail order pharmacy revenues		1,623		1,447		1,420
Other revenues		225		236		269
Net investment income		259		263		230
Segment revenues	$	23,080	$	16,389	$	16,053
Depreciation and amortization	$	500	$	297	$	255
Income taxes	$	793	$	616	$	520
Segment earnings	$	1,418	$	1,105	$	940
(1) Excludes the international health care business.
(2) Includes minimum premium business that has a risk profile similar to experience-rated funding arrangements. The risk portion of minimum premium revenue is reported in experience-rated medical premium whereas the self funding portion of minimum premium revenue is reported in fees. Also includes certain non-participating cases for which special customer level reporting of experience is required.
(3) Includes fees related to the international health care business. Fees related to Medicare Part D of $61 million in 2011 and $57 million in 2010 have been reclassified to premiums to conform to current presentation.

(In millions)	2012		2011		2010
Group Disability and Life
Premiums and fees:
Life	$	1,426	$	1,333	$	1,341
Disability		1,413		1,268		1,167
Other		270		256		262
Total		3,109		2,857		2,770
Other revenues		-		-		123
Net investment income		300		291		287
Segment revenues	$	3,409	$	3,148	$	3,180
Depreciation and amortization	$	10	$	10	$	8
Income taxes	$	116	$	113	$	127
Segment earnings	$	279	$	295	$	305
Global Supplemental Benefits
Premiums and fees	$	1,984	$	1,528	$	1,231
Other revenues		21		15		22
Net investment income		90		83		69
Segment revenues	$	2,095	$	1,626	$	1,322
Depreciation and amortization	$	28	$	13	$	8
Income taxes	$	36	$	36	$	42
Equity in income of investees	$	10	$	15	$	18
Segment earnings	$	142	$	97	$	84
Run-off Reinsurance
Premiums and fees and other revenues	$	(98)	$	20	$	(133)
Net investment income		102		103		114
Segment revenues	$	4	$	123	$	(19)
Income tax benefits	$	-	$	(99)	$	(136)
Segment earnings (loss)	$	-	$	(183)	$	26
Other Operations
Premiums and fees and other revenues	$	155	$	169	$	174
Net investment income		388		400		404
Segment revenues	$	543	$	569	$	578
Depreciation and amortization	$	22	$	25	$	21
Income taxes	$	43	$	29	$	39
Segment earnings	$	82	$	89	$	85
Corporate
Other revenues and eliminations	$	(61)	$	(58)	$	(62)
Net investment income		5		6		1
Segment revenues	$	(56)	$	(52)	$	(61)
Income tax benefits	$	(148)	$	(101)	$	(98)
Segment loss	$	(329)	$	(184)	$	(211)
Realized investment gains
Realized investment gains	$	44	$	62	$	75
Income taxes		13		21		25
Realized investment gains
net of taxes and noncontrolling interest	$	31	$	41	$	50
Total
Premiums and fees and other revenues	$	26,308	$	19,210	$	18,528
Mail order pharmacy revenues		1,623		1,447		1,420
Net investment income		1,144		1,146		1,105
Realized investment gains		44		62		75
Total revenues	$	29,119	$	21,865	$	21,128
Depreciation and amortization	$	560	$	345	$	292
Income taxes	$	853	$	615	$	519
Segment earnings	$	1,592	$	1,219	$	1,229
Realized investment gains,
net of taxes and noncontrolling interest	$	31	$	41	$	50
Shareholders' net income	$	1,623	$	1,260	$	1,279

Premiums and fees, mail order pharmacy revenues and other revenues by product type were as follows for the years ended December 31:

(In millions)	2012		2011		2010
Medical	$	20,973	$	14,443	$	14,134
Disability		1,413		1,268		1,167
Supplemental Health, Life, and Accident		3,680		3,117		2,834
Mail order pharmacy		1,623		1,447		1,420
Other		242		382		393
Total	$	27,931	$	20,657	$	19,948

Premiums and fees, mail order pharmacy revenues and other revenues by geographic location were as follows for the years ended December 31:

(In millions)	2012		2011		2010
U.S.	$	25,217	$	18,522	$	18,326
South Korea		1,076		909		717
All other foreign		1,638		1,226		905
Total	$	27,931	$	20,657	$	19,948

Consolidated pre-tax income from continuing operations is primarily attributable to domestic operations. Consolidated pre-tax income from continuing operations generated by the Company's foreign operations was approximately 8% in 2012, 10% in 2011 and 9% in 2010.

Concentration of risk.  For theCompany's Global Supplemental Benefits segment, South Korea is the single largest geographic market.South Korea generated 54% of the segment's revenues and 90% of the segment's earnings in 2012.Due to the concentration of business in South Korea, the Global Supplemental Benefits segment is exposed to potential losses resulting from economic and geopolitical developments in that country, as well as foreign currency movements affecting the South Korean currency, that could have a significant impact on the segment's results and the Company's consolidated financial results.