INDIANAPOLIS ? Cigna Corp. said Friday its third-quarter profit tumbled 35 percent due to a bigger hit from some businesses the managed care company discontinued years ago.
The Bloomfield, Conn., health insurer reported its net income fell to $200 million, or 74 cents per share, in the three months that ended Sept. 30, down from $307 million, or $1.13 per share, a year ago.
Adjusted income totaled $1.20 per share. Analysts surveyed by FactSet expected, on average, earnings of $1.23 per share.
Revenue climbed nearly 7 percent to $5.61 billion from $5.27 billion a year ago. Analysts expected $5.45 billion in revenue.
Cigna said results included losses totaling $179 million, or 66 cents per share, from its guaranteed minimum income benefits and variable annuity death benefits businesses. The losses were mainly due to low interest rates and "sustained volatile equity market conditions." That compares to losses totaling $44 million, or 16 cents per share, a year earlier.
Cigna discontinued those businesses in 2000 and operates them in run-off mode, meaning it seeks no new business. But they still can hurt the company's performance when the market turns bad because Cigna's liabilities toward them increase.
The insurer said medical membership in its health care segment, its largest business, climbed slightly to about 11.5 million people.
Cigna is the fourth-largest commercial health insurer based on enrollment. It operates health care, group disability and life segments in the U.S. The insurer also has an international segment that sells individual insurance in several countries and operates an expatriate business that covers people living outside their home countries.
Cigna said earlier this week it expects 2011 adjusted earnings of $5.05 to $5.30 per share, which is up from its previous forecast of $4.95 to $5.25. Analysts expect annual earnings of $5.29 per share.
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