CIGNA Reports Lower Net Income

The employee benefits unit generated a total of $171 million in net income on $3.8 billion in revenue, compared with $202 million in net income on $3.7 billion in revenue.

Major medical enrollment held steady at 14 million. Average revenue per member increased 6%, to $598, but CIGNA estimates the underlying rate of medical cost inflation to be about 12% to 13%. Costs are up because doctors are charging more and patients are getting more inpatient and outpatient care, CIGNA says.

The retirement and investment services unit brought in $49 million in net income on $498 million in revenue, compared with $57 million in net income on $486 million revenue.

At the retirement services unit, defined contribution assets fell 15% from Sept. 30, 2000, to $28 billion, and new deposits fell 33%, to $1.3 billion.

But defined benefit assets fell only 4%, to $18 billion, and defined benefit plan deposits actually rose 19%, to $406 million, according to company figures.