Aetna 2005 Annual Report Download - page 10

Download and view the complete annual report

Please find page 10 of the 2005 Aetna annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 50

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50

In addition, we made good progress in 2005 achieving an
operating expense ratio of 19.4 percent, compared to the full-year
2004 level of 20.1 percent. We will strive to make continued
improvements in operating efficiency in 2006 and beyond.
Overall, Aetna’s 2005 operating earnings increased 28 percent to
$2.33 per share from the $1.82 per share we reported for 2004,
excluding favorable prior-period reserve development. Both figures
are adjusted for the stock split we announced in January 2006.
RETURNING SIGNIFICANT VALUE TO SHAREHOLDERS
As a result of Aetna’s strong financial performance, we were able
to return significant value to our shareholders:
■Our share price increased by more than 51 percent for the year;
outperforming, by far, our peers, and exceeding that of the S&P
500 Index and the Morgan Stanley HMO Index.
■Twice in less than 12 months Aetna’s stock price rose to the
point where we completed a two-for-one stock split.
■Since the beginning of Aetna’s turnaround in May 2001 – when
Aetna’s stock price fell below $6, adjusted for splits – to
year-end 2005, Aetna’s stock price has appreciated more than
711 percent.
CREATING INNOVATIVE PRODUCTS
One of the ways we have differentiated Aetna is through our
innovative products. In 2001, Aetna was the first national
company to offer a consumer-directed plan with our Aetna
HealthFund®Health Reimbursement Arrangement product and
in 2004, the first insurer to launch a Health Savings Account
option. We also are unique in our ability to integrate
performance-based networks with consumer-directed health plans.
6
Our share price
increased by more than
51 percent for the year;
outperforming our peers,
and the S&P 500 and
Morgan Stanley indices.
From the beginning of
Aetna’s turnaround in
May 2001 to year-end
2005, Aetna’s stock price
has appreciated more
than 711 percent.