The Cigna Group · NYSE:CI
The Cigna — Cigna — Investor Day (2011)
119 slides from The Cigna's investor day presentation, 2011
Slide 1: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 2: Cautionary Statement for Safe Harbor Provisions
CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 CIGNA Corporation and its subsidiaries (the “Company”) and its representatives may from time to time make written and oral forward-looking statements, including statements contai
Slide 3: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 4: Welcome
Welcome Ted Detrick Vice President, Investor Relations 4 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 5: Forward Looking Statements
Forward Looking Statements 5 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 6: Update on Business Strategy
Update on Business Strategy David Cordani President and CEO, CIGNA 6 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 7: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 8: Chaos: Fragmented Health Care Delivery System
Chaos: Fragmented Health Care Delivery System 8 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 9: Chaos: Fragmented Health Care Delivery System
Chaos: Fragmented Health Care Delivery System Delivery System Pharma Medical Technology Physicians Acute Care Devices Primary Care Hospitals Specialists Urgent Care Surgical Centers ERs 9 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution li
Slide 10: Chaos: Fragmented Health Care Delivery System
Chaos: Fragmented Health Care Delivery System Delivery System Pharma Medical Technology Physicians Acute Care Devices Primary Care Hospitals Specialists Urgent Care Surgical Centers ERs Individual Government Employer (Federal & State) Shifting cost and responsibility to the individual Fi
Slide 11: Chaos: Fragmented Health Care Delivery System
Chaos: Fragmented Health Care Delivery System Delivery System Pharma Medical Technology Physicians Acute Care Devices Primary Care Hospitals Specialists Urgent Care Surgical Centers ERs COST & RESPONSIBILITY HEALTH STATUS Individual Government Employer (Federal & State) Shifting cost and
Slide 12: Intimacy + Service = Enduring Value Creation
Intimacy + Service = Enduring Value Creation CIGNA Pharma Medical Devices INCENTIVES INFORMATION Technology CARE EXTENDERS Individual Clinician Physicians Acute Care CIGNA 12 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorize
Slide 13: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 14: Understanding Customer Needs
Understanding Customer Needs Bert Scott President, U.S. Commercial Markets 14 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 15: Key Messages
Key Messages The environment CIGNA is putting CIGNA's strategy is continuing to the Customer and value prop shift at the center of create competitive everything we do advantage in the marketplace 15 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution lim
Slide 16: 2011 Financial Outlook: U.S. Operations
2011 Financial Outlook: U.S. Operations Health Care: High single to low double digit growth REVENUE Group Disability and Life: Mid-single digit growth Health Care: $800M to $860M EARNINGS1 Group Disability and Life: $270M to $290M MEMBERSHIP 0 to 3% growth2 (1) Reflects adjusted income from operatio
Slide 17: Our Mission, Vision and Value Proposition
OUR MISSION To improve the health, well-being and sense of security of the people we serve OUR VISION Deliver improved health and productivity to customers and clients through innovative, cost-saving health care programs and service VALUE PROPOSITION – DELIVERING OUR PROMISE We put the We innovate W
Slide 18: CIGNA Understands Emerging Client Needs
CIGNA Understands Emerging Client Needs Sustainability Affordability Productivity 18 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 19: Continuing to Improve Our Value Proposition
As the Environment Continues to Shift, CIGNA Continues to Improve Our Value Proposition FROM TO Unit Employee health Cost and productivity Focus Tactical incentives Outcome-based incentives Optional Full consumer consumer driven health driven health Claim and Overall payment customer metrics experie
Slide 20: Our Strengths Differentiate CIGNA
Our Strengths Differentiate CIGNA Consultative Strong, Personalized Selling Service Clinical Partnership Customer and Quality Intimacy 20 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 21: Strategy and Value Proposition Create Competitive Advantage
CIGNA's Strategy and Value Proposition Create Competitive Advantage in the Marketplace Advantaged global and Highly consultative selling expatriate offering approach and industry-leading sales force talent Onsite health Differentiated capabilities service model Leading analytic capabilities to suppo
Slide 22: Video
Video 22 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 23: Key Messages
Key Messages The environment CIGNA is putting CIGNA's strategy is continuing to the Customer and value prop shift at the center of create competitive everything we do advantage in the marketplace 23 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution lim
Slide 24: Q&A
Q&A Bert Scott President, U.S. Commercial Markets David Guilmette President, National Segment Mike Triplett President, Regional Segment, Government and Taft-Hartley 24 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized
Slide 25: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 26: Exceeding Our Customers' Needs
Exceeding Our Customers’ Needs Matt Manders President, U.S. Service, Clinical and Specialty Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 27: Our Mission, Vision and Value Proposition
OUR MISSION To improve the health, well-being and sense of security of the people we serve OUR VISION Deliver improved health and productivity to customers and clients through innovative, cost-saving health care programs and service VALUE PROPOSITION – DELIVERING OUR PROMISE We put the We innovate W
Slide 28: Understanding the Health Care Professional
Understanding the Health Care Professional Health Care Professional CIGNA 28 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 29: Video
Video 29 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 30: Understanding the Health Care Professional
Understanding the Health Care Professional Health Care Professional CIGNA 30 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 31: Understanding the Customer
Understanding the Customer Be understandable Ensure coverage when needed Be available Be easy to do when needed business with Provide helpful information 31 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 201
Slide 32: Consistent, Reliable & Differentiated Service
Consistent, Reliable & Differentiated Service for All Customer Interactions I want to sign up for a I’m seeking a health care specialist in smoking cessation program CIGNA’s physician directory I need to talk to a I have a question about health coach a disability benefit I’m looking for educational
Slide 33: Putting the Customer at the Center of Everything We Do
CIGNA is Putting the Customer at the Center of Everything We Do Industry’s Only 24/7 Customer Service My Personal ChampionSM Award-Winning Customer-Friendly Explanation of Benefits Insurance Integrated Jargon Personal Health Team Words We Use 33 Confidential, unpublished property of CIGNA. Do not du
Slide 34: Improving Health & Productivity
Improving Health & Productivity Actionable Information Aligned Incentives Transparency of Information Programs and Solutions 34 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 35: 2011 Financial Outlook: U.S. Operations
2011 Financial Outlook: U.S. Operations Health Care: High single to low double digit growth REVENUE Group Disability and Life: Mid-single digit growth EARNINGS1 Health Care: $800M to $860M Group Disability and Life: $270M to $290M 0 to 3% growth2 MEMBERSHIP GUARANTEED 82% to 83% COST CARE RATIO TOTA
Slide 36: Innovative Approaches to Benefit Affordability
Innovative Approaches to Benefit Affordability Network Redefinition Informatics Health Advocacy CIGNA Enhanced Patient-Physician Higher Satisfaction Delivery Relationship Health Improvement Individuals Delivery System Performance-Based Superior Experience System Incentives Lower Costs
Slide 37: Our Mission, Vision and Value Proposition
OUR MISSION To improve the health, well-being and sense of security of the people we serve OUR VISION Deliver improved health and productivity to customers and clients through innovative, cost-saving health care programs and service VALUE PROPOSITION – DELIVERING OUR PROMISE We put the We innovate W
Slide 38: Q&A
Q&A Matt Manders President, U.S. Service, Clinical and Specialty Alan Muney, MD, MHA Senior Vice President, Total Health and Network Julie Vayer Vice President, Health Care Professional Solutions 38 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distributi
Slide 39: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 40: Break
Break 40 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 41: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 42: Our Global Solutions – Delivering Today, Positioned for Continued Growth
Our Global Solutions – Delivering Today, Positioned for Continued Growth Bill Atwell President, CIGNA International Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 43: Key Messages
Key Messages Market dynamics: Customer-driven Leading through expanding middle class; business models innovation in products growing globally mobile and channels workforce; changing health care landscape Outcome: Consistent double digit revenue and earnings growth with strong profitability 43 Confid
Slide 44: International Overview
International Overview Leaders in bringing innovative products/services to the markets we serve. Four focused businesses – Expatriate Benefits Group – HealthCare Benefits (UK & Spain) – Health, Life & Accident Individual – Individual Private Medical Insurance 12,000 global workforce (8,500 distr
Slide 45: Financial Highlights
Financial Highlights Revenue and Earnings Growth Trend USD B USD M Revenue CAGR Earnings 2,500 2.5 13% 300 2,000 2.0 250 Revenue 200 1,500 1.5 CAGR Earnings 19% 150 1,000 1.0 100 500 0.5 50 0 0 '05 '06 '07 '08 '09 '10 45 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Us
Slide 46: Our Customer Base
Our Customer Base Policies and Medical Membership Growth Trend Thousands CAGR 8,000 19% 6,000 4,000 2,000 0 '05 '06 '07 '08 '09 '10 46 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 47: Go Deep. Go Global. Go Individual.
Strategy Update Go Deep. Go Global. Go Individual. Broaden Product Expand into New Grow Product Portfolio Geographies Portfolio Expand Distribution Leverage Expand Distribution Channels Capabilities Across Channels Leverage Divisions Competencies Across Business Lines 47 Confidential,
Slide 48: A Product Continuum
A Product Continuum Meeting Evolving Customer Needs Individual Group Segments Middle Class High Net Worth Local Multinational Employer Corporation Peace of mind & Access to care & Employee Global health & Needs sense of security willing to pay benefits wellness solutions Product Scope Simple, Fixed
Slide 49: A Globally-Minded Team
A Globally-Minded Team A winning team of experienced global professionals 49 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 50: Spotlight on Expatriate Benefits
Spotlight on Expatriate Benefits Andrew Kielty President, Expatriate Benefits CIGNA International 50 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 51: Expatriate Benefits
Expatriate Benefits OUR MISSION Help the people we serve improve their health, well-being, and sense of security OUR VISION Be the ‘go to’ company in the globally mobile market VALUE PROPOSITION – DELIVERING OUR PROMISE Experts in Cost effective, We make it Guaranteed Delivering 30+ years helping ch
Slide 52: Vanbreda Acquisition: Good Strategic Fit
Vanbreda Acquisition: Good Strategic Fit Strengths Strengths • North America • Middle East CIGNA + Vanbreda • Europe • Asia Global leadership position Diversified global portfolio • Employer Enhanced capabilities • Individual Accelerated profitable growth • Global network • Intergovernmental
Slide 53: Expatriate Competitive Landscape
Competitive Landscape Expatriate Competitive Landscape - Group and Individual (After acquisition of Vanbreda) Top Players GWP Equivalent pa B C SH AG s nz M Bu er A P M l G lia ba th PP N th Al O lo IG l A rg ea AX te C H In i ch un M 53 Confidential, unpublished property of CIGNA. Do not duplicate
Slide 54: The Combined Opportunity
The Combined Opportunity 740,000 covered individuals around the globe; an unrivaled global network of 900,000 health care professionals USA and Canada Europe Asia 11% 36% 20% Latin America 6% Africa / Middle East Oceania Note: Percentages are approximations 25% 2% Leadership position in the global e
Slide 55: In Summary
In Summary Significant growth opportunities exist through: Continued innovation to meet customer needs Increased leverage of our global network Increased share of multinational clients Expansion in the intergovernmental (IGO) segment Increased cross-border growth Proven results; expect con
Slide 56: Spotlight on Health, Life & Accident
Spotlight on Health, Life & Accident Jason Sadler Chief Executive Officer, Health, Life & Accident, CIGNA International 56 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 57: Health, Life & Accident
Health, Life & Accident OUR MISSION Help the people we serve improve their health, well-being and sense of security OUR VISION Be the ‘go to’ company for our affinity partners and customers VALUE PROPOSITION – DELIVERING OUR PROMISE Experts in World-class Innovative Easy to buy, Affinity direct-to-
Slide 58: A Portfolio Approach to Growth
Phase 4 A Portfolio Approach to Growth Korea Product and Channel Innovation Model Phase 3 Integrated Phase 2 NZ Approach to Customer, Product and China Channels Expanded Product Indonesia Product Suite; Innovation, Phase 1 Direct and CIGNA Direct Affinity Thailand Range of Health, Life & Accident Tu
Slide 59: Korea: Innovation – Products and Distribution
Korea: Innovation – Products and Distribution Revenue Earnings Internet USD M CVM Dental USD M Bancassurance 140 Guaranteed 800 DRTV / Home Issue 120 Shopping VUL 100 600 Hospital Cash Policy Owner 80 Family Income 400 Marketing 60 Cancer Medical Plan 40 200 20 0 0 '97 '98 '9
Slide 60: A Key Differentiator: Predictive Modeling
A Key Differentiator: Predictive Modeling Customer Value Management (CVM) Targets the best prospects Produces higher response rates Reduces marketing costs Increases income Enhances customer relationships Provides partners with a competitive edge Targeting the right product to the right
Slide 61: CIGNA Direct
CIGNA Direct Direct Lead Volume Growth Leads 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2009 2010 2011 F Strategy: Leverage Direct Response Television (DRTV) successes; develop internet to capture market opportunities 61 Confidential, unpublished property of CIGNA. Do not duplicate or distrib
Slide 62: Video
Video 62 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 63: In Summary
In Summary Expect significant growth opportunities through: A portfolio approach Innovation for sustainable growth Critical mass of talent and capabilities Leverageable and differentiated business model 63 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and d
Slide 64: CIGNA Indonesia
CIGNA Indonesia Christine Setyabudhi Country Manager, Health, Life & Accident – Indonesia, CIGNA 64 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 65: The Market – Indonesia
The Market – Indonesia Country Facts and Key Indicators Large Population 238 M Growing GDP 6.0% Middle Class Growth, 10-yr CAGR (’10–’20) 5% 4th largest population in the world … Demographics make Indonesia an excellent opportunity for growth 65 Confidential, unpublished property of CIGNA. Do not du
Slide 66: Our Affinity Business Model
Our Affinity Business Model CIGNA PARTNERS THE SYNERGY Product Innovation Financial Institutions: Fee Income Channel Leadership Banks Customer Loyalty – Telemarketing Credit Card Companies Customer Retention Integrated Support Customer Differentiation – Predictive Modeling Non-Fina
Slide 67: Our Best-in-Class Telemarketing Model
Our Best-in-Class Telemarketing Model People Process Customer Technology Operations Standardized best practices continuously improve the telemarketing model, driving higher retention and improved efficiency 67 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distr
Slide 68: Our Results
Our Results ) Revenue Growth Trend USD '05 M'06 '07 '08 '09 '10 CAGR 26.7 37.3 52.7 66.7 78.4 94.2 29% 100 90 80 29% 70 60 50 40 30 20 10 0 '05 '06 '07 '08 '09 '10 CIGNA is the leading affinity marketing company in Indonesia 68 Confidential, unpublished property of CIGNA. Do not duplicate or distrib
Slide 69: Spotlight on China
Spotlight on China David Skinner Chief Executive Officer, China CIGNA International 69 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 70: The Market – China
The Market – China Country Facts and Key Indicators Large Population 1.3 B Growing GDP 11.1.% Middle Class Growth, 10-yr CAGR (’10–’20) 9% Health Care in China China U.S. GDP per Capita ($US) (2010) 7,400 47,000 Health Care Spend per Capita ($US) 173 7,290 Health Care Spend as a % of GDP 2% 15% The
Slide 71: A Leading Innovator with a Different Approach
A Leading Innovator with a Different Approach (the Joint Venture Company) Leveraging our strong joint venture Pioneering telemarketing and direct marketing capability through affinity partners Emerging direct-to-consumer business through internet and DRTV (2010 launch) Bancassurance through
Slide 72: Video
Video 72 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 73: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 74: Our Footprint
Our Footprint Population Policies Provinces (millions) (thousands) 2003: Guangdong (Shenzhen) 12 135 2005: Beijing 14 98 2005: Guangdong (Guangzhou) 67 110 2005: Shanghai 16 167 2007: Jiangsu 74 108 2008: Sichuan 87 36 2008: Hubei 60 35 2009: Zhejiang 46 82 2010: Shandong 91 20 2011: Liaoning 42 - 2
Slide 75: CIGNA & CMC: Leading Foreign Life Insurance Company
CIGNA & CMC: Leading Foreign Life Insurance Company The Top 10 Life Insurance Companies in China By 21st Century Business Herald Newspaper – Feb. 26th, 2011 1. China Life 2. Ping An Life 3. Pacific Ocean Life Locally Owned 4. Tai Kang Life 5. Tai Ping Life 6. CIGNA & CMC 7. China People’s Life 8. Si
Slide 76: History of Success
History of Success Policy and Revenue Growth Trend (China JV 100%) Thousands USD M Policies CAGR Revenues 900 64% 300 600 200 Policies 300 CAGR 100 Revenue 107% 0 0 '05 '06 '07 '08 '09 '10 76 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited so
Slide 77: In Summary
In Summary Huge market with significant opportunity Leveraging CIGNA strengths in HealthCare and Individual Robust footprint achieved through targeted geographic expansion Aligned JV partnership driving strong top and bottom line growth 77 Confidential, unpublished property of CIGNA. Do not
Slide 78: Closing Thoughts
Closing Thoughts Key Messages Market dynamics: expanding middle class; growing globally mobile workforce; and changing the health care landscape Customer-driven business models Leading through innovation in products and channels Outcome: Consistent double digit revenue and earnings growth with
Slide 79: Q&A
Q&A Bill Atwell President, CIGNA International Andrew Kielty President, Expatriate Benefits, CIGNA International Jason Sadler Chief Executive Officer, Health, Life & Accident, CIGNA International Christine Setyabudhi Country Manager, Health, Life & Accident – Indonesia, CIGNA International
Slide 80: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 81: Lunch Break
Lunch Break 81 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 82: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 83: Financial Update
Financial Update Tom McCarthy Acting Chief Financial Officer Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 84: Key Highlights
Key Highlights Focused strategy with effective execution Diversified portfolio positioned for growth Strong capital position and financial flexibility Meaningful levers for shareholder value creation Go Deep. Go Global. Go Individual. 84 Confidential, unpublished property of CIGNA. Do not du
Slide 85: Creating Sustainable Shareholder Value
Creating Sustainable Shareholder Value Capital Deployment Balance Sheet Management Execution of Growth Strategy 85 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 86: Creating Sustainable Shareholder Value: Focused Growth, Operating Efficiency
Creating Sustainable Shareholder Value Capital Focused Growth Deployment Operating Efficiency Balance Sheet Management Execution of Growth Strategy 86 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011
Slide 87: 2011 Growth Estimates
2011 Growth Estimates High High Double single to single to digits low Mid- low double single double digits1 digits digits1 International U.S. HealthCare HL&A HealthCare Membership policies3 Membership 0 to 3% growth2 > 7 million > 1.1 million (1) Excludes impact of loss of Individual Medicare Advant
Slide 88: 2011 Earnings Outlook
2011 Earnings Outlook* ($ in millions, except per share amounts) 2009 2010 2011 Actual Actual Estimate HealthCare $ 729 $ 861 $ 800 – $860 Group Disability & Life 279 291 270 – 290 8% International 182 243 260 – 280 CAGR Ongoing Businesses $1,190 $1,395 $1,330 – $1,430 19% return on equity Consolida
Slide 89: HealthCare Earnings Roll Forward: 2010–2011
HealthCare Earnings* Roll Forward: 2010–2011 (after-tax, $ in millions) 2010 Actual $861 2010 Prior Year Claim Development (26) Expected Acceleration in Utilization / Rebates (45) Growth / Specialty 40 Improved Operating Efficiency 30 (net reduction in medical operating expenses) Other Strategic Inv
Slide 90: Creating Sustainable Shareholder Value: Operating Efficiency
Creating Sustainable Shareholder Value Capital Focused Growth Deployment Operating Efficiency Balance Sheet Management Execution of Growth Strategy 90 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011
Slide 91: HealthCare Operating Expenses (2009–2010)
HealthCare Operating Expenses (2009–2010) (pre-tax, $ in millions) FY 2009 FY 2010 Actual Actual Reported on face of Total Operating Expenses $3,849 $4,072 income statement Mainly a function of risk Premium Taxes and Commissions $385 $402 business volume Specialty product Specialty and Other $709 $8
Slide 92: HealthCare Operating Expenses (2009–2011)
HealthCare Operating Expenses (2009–2011) (pre-tax, $ in millions) FY 2009 FY 2010 FY 2011 Actual Actual Estimate Total Operating Expenses $3,849 $4,072 $4,110 – $4,150 Premium Taxes and Commissions $385 $402 Specialty and Other $709 $857 Individual Segment Expansion $32 $74 Medical Operating Expens
Slide 93: HealthCare Medical Operating Expenses PMPY
HealthCare Medical Operating Expenses PMPY $250 $249 $249 $245 $245 $245 $240 $240 $240 toto $235 $235 $235 Expect $5 to $10 PMPY improvement in 2011 $230 2009 Actual 2010 Actual 2011 Estimate 93 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limite
Slide 94: HealthCare Total Operating Expense Ratio
HealthCare Total Operating Expense Ratio 3 0 .0 % 29.6% 29.4%* 2 9 .0 % 29.4% 29.4% 28.0% 27.7%* 2 8 .0 % 2 7 .0 % 27.0% 27.0% to to 26.7% 26.7% 26.5% 26.5% 2 6 .0 % Total T ota l OpEx O pE x Ratio R a tio excl PFFS T ota l OpEx Total O pE x Ratio R a tio excl PFFS 2 5 .0 % 2 0 0 9 A c tual 2 0 1 0
Slide 95: HealthCare Total Operating Expense Ratio
HealthCare Total Operating Expense Ratio 3 0 .0 % 29.6% 29.4%* 2 9 .0 % 29.4% 29.4% 2010 adjusted to 28.0% 27.7%* industry mix 2 8 .0 % would be 17% 2 7 .0 % 27.0% 27.0% to to 26.7% 26.7% 26.5% 26.5% 2 6 .0 % Total T ota l OpEx O pE x Ratio R a tio excl PFFS T ota l OpEx Total O pE x Ratio R a tio e
Slide 96: Creating Sustainable Shareholder Value: Balance Sheet Management
Creating Sustainable Shareholder Value Capital Focused Growth Deployment Operating Efficiency Balance Sheet Management Execution of Growth Strategy 96 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011
Slide 97: Key Highlights: 2011 Strategy Execution
Key Highlights: 2011 Strategy Execution Execution of growth strategy: Strong Solid growth Continued contributions in targeted improvements from each of areas, strong in operating our ongoing pricing efficiency businesses discipline 97 Confidential, unpublished property of CIGNA. Do not duplica
Slide 98: Balance Sheet Management
Creating Sustainable Shareholder Value Capital Management Capital Investment Portfolio Deployment Run-Off Reinsurance Balance Sheet Management Execution of Growth Strategy Capital Management Investment Portfolio Run-Off Reinsurance 98 Confidential, unpublished property of CIGNA. Do not d
Slide 99: Strong Capital Management
Strong Capital Management Strong Issued Long-term subsidiary long-term plan for capital debt at funding position, attractive pension consistent rates obligation with internal targets 99 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited so
Slide 100: Balance Sheet Management
Creating Sustainable Shareholder Value Capital Management Capital Investment Portfolio Deployment Run-Off Reinsurance Balance Sheet Management Execution of Growth Strategy 100 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to au
Slide 101: Strong, Diversified Investment Portfolio
Strong, Diversified Investment Portfolio CIGNA’s Investment Portfolio by Asset Class: $19.4B at 12/31/10 (excl. policy loans) Solid investment results High quality portfolio, diversified between and within asset classes Private Asset Dedicated, experienced in-house Classes investment managemen
Slide 102: Balance Sheet Management
Creating Sustainable Shareholder Value Capital Management Capital Investment Portfolio Deployment Run-Off Reinsurance Balance Sheet Management Execution of Growth Strategy 102 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to au
Slide 103: Run-Off Reinsurance
Run-Off Reinsurance ~ 70% decrease in policies VADBe and GMIB in run-off since 2000 since 2001 2,000 VADBe Policies (000s) Focused risk management 1,500 Demonstrated capacity to withstand significant market downturns 1,000 500 Covered policies continue to decline 0 2001 2002 2003 2004 2005 2
Slide 104: Recent Actions
Recent Actions: Reinsured WC / PA business Reduced risk Additional hedging Dedicated structure Reinsurance to Arbor Improved financial flexibility Incremental capital 104 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to
Slide 105: Capital Deployment
Creating Sustainable Shareholder Value Parent Company Capital Cash Flow Deployment Capital Deployment Balance Sheet Management Execution of Growth Strategy 105 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel
Slide 106: 2011 Parent Company Cash Flow
2011 Parent Company Cash Flow Full-Year 2011 $ millions Projection BEGINNING PARENT COMPANY CASH $810 Subsidiary Dividends $1,000 Net Debt Issuance $150 Net Pension Contributions ($160) Other Sources and Uses1 ($200) FULL-YEAR PARENT COMPANY CASH AVAILABILITY $1,600 Target to Maintain at Parent ($40
Slide 107: Capital Deployment Strategy
Capital Deployment Strategy Prioritize the use of capital to: Support growth Consider Return of ongoing strategic M&A capital to operations, investors pension plan via share funding, Run-Off repurchase Reinsurance business 107 Confidential, unpublished property of CIGNA. Do not duplicate or di
Slide 108: Creating Sustainable Shareholder Value
Creating Sustainable Shareholder Value Capital Deployment Balance Sheet Management Execution of Growth Strategy 108 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 109: Longer-Term Outlook
Longer-Term Outlook Average 10% to 13% 3 to 5-Year EPS Growth 109 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 110: Longer-Term Outlook
Longer-Term Outlook Mid- to upper-single Average digit revenue/ earnings 10% to 13% growth 3 to 5-Year + EPS Capital Growth deployment 110 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 111: Longer-Term Outlook
Longer-Term Outlook U.S. HealthCare and Group Operations: – Mid single digit revenue / earnings growth Mid- to – Strong margins and return on capital upper-single Average digit revenue/ International Operations: earnings 10% to 13% − Double digit revenue / earnings growth growth 3 to 5-Year − St
Slide 112: Longer-Term Outlook
Longer-Term Outlook U.S. HealthCare and Group Operations: – Mid single digit revenue / earnings growth Mid- to – Strong margins and return on capital upper-single Average digit revenue/ International Operations: earnings 10% to 13% − Double digit revenue / earnings growth growth 3 to 5-Year − St
Slide 113: Investor Considerations
Investor Considerations Creating Sustainable Shareholder Value with: Solid performance in each of our ongoing businesses Diversified portfolio of businesses with differentiated growth opportunities Strong return on capital and free cash flow generation Attractive 2011 and longer-term earning
Slide 114: Q&A
Q&A David Cordani President and CEO, CIGNA Tom McCarthy Acting Chief Financial Officer 114 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 115: Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited
Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 116: Appendices
Appendices 116 Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 CIGNA.
Slide 117: Comparative Summary of Financial Results
Exhibit 1 CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited) (Dollars in millions, except per share amounts) Three Months Ended Year Ended December 31, December 31, 2010 2009 2010 2009 REVENUES Premiums and fees $ 4,725 $ 3,992 $ 18,393 $ 16,041 Net investment income 276 262 1,10
Slide 118: Reconciliation of Adjusted Income from Operations to Shareholders' Net Income
CIGNA CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (unaudited) Exhibit 2 RECONCILIATION OF ADJUSTED INCOME (LOSS) FROM OPERATIONS TO SHAREHOLDERS' NET INCOME (Dollars in millions, except per share amounts) Diluted Earnings Disability Run-off Other Per Share Consolidated Health Care and Life Intern
Slide 119: Reconciliation of Health Care Segment Operating Expense Ratio
Exhibit 3 CIGNA Corporation Reconciliation of Health Care Segment Operating Expense Ratio excluding Medicare Individual Private Fee for Service (Individual PFFS) to Reported GAAP Amounts (Dollars in millions) Year Ended December 31, 2010 2009 Total Health Care segment revenues (a) $ 15,248 $ 13,109