Insurer Cigna's 3Q Profit Grows 92 Percent

TOM MURPHY

INDIANAPOLIS (AP) — Managed care company Cigna Corp.'s third-quarter profit soared 92 percent, as improving equity markets spurred a big turnaround in a discontinued business that hurt the insurer last year.

Philadelphia-based Cigna said Thursday it generated $16 million in income during the quarter from variable annuity products in a segment the insurer maintains but no longer sells or markets. Those products lost $133 million in the same quarter last year.

Overall, the insurer earned $329 million, or $1.19 per share, in the three months that ended Sept. 30. That compared to $171 million, or 62 cents per share, in the same quarter of 2008.

Revenue fell 8 percent to $4.5 billion.

That translates into an overall profit margin of 7.3 percent, well above the 3.4 percent Cigna recorded last year in the third quarter but below double-digit margins seen in other industries. The insurer's margin in its health care segment, which includes employer-sponsored group health insurance, was 6.3 percent.

Insurers have been bombarded with criticism over their profits during the health care overhaul debate in Congress. Advocates of a government-created public option for health insurers say it would help trim industry profits and "keep insurance companies honest."