Aetna 2011 Annual Report Download - page 16

Annual Report- Page 10
GROUP INSURANCE
Group Insurance primarily includes group life insurance products offered on an Insured basis, including basic and
supplemental group term life, group universal life, supplemental or voluntary programs and accidental death and
dismemberment coverage. Group Insurance also includes: (i) group disability products offered to employers on
both an Insured and an ASC basis, which consist primarily of short-term and long-term disability insurance (and
products which combine both), (ii) absence management services offered to employers, which include short-term
and long-term disability administration and leave management, and (iii) long-term care products that were offered
primarily on an Insured basis, which provide benefits covering the cost of care in private home settings, adult day
care, assisted living or nursing facilities. We no longer solicit or accept new long-term care customers.
Operating Summary
(Millions)
Premiums:
Life
Disability
Long-term care
Total premiums
Fees and other revenue
Net investment income
Net realized capital gains
Total revenue
Current and future benefits
Operating expenses:
Selling expenses
General and administrative expenses
Total operating expenses
Amortization of other acquired intangible assets
Total benefits and expenses
Income before income taxes
Income taxes
Net income
2011
$ 1,034.4
534.5
45.9
1,614.8
100.4
266.0
44.4
2,025.6
1,413.4
77.2
275.6
352.8
5.0
1,771.2
254.4
72.6
$ 181.8
2010
$ 1,082.5
536.5
52.1
1,671.1
105.0
275.1
67.4
2,118.6
1,536.6
78.2
264.3
342.5
6.9
1,886.0
232.6
53.0
$ 179.6
2009
$ 1,093.0
559.4
67.8
1,720.2
106.9
274.1
41.8
2,143.0
1,575.2
93.2
283.4
376.6
6.9
1,958.7
184.3
38.7
$ 145.6
The table presented below reconciles net income to operating earnings:
(Millions)
Net income
Net realized capital gains
Operating earnings
2011
$ 181.8
(28.8)
$ 153.0
2010
$ 179.6
(51.6)
$ 128.0
2009
$ 145.6
(41.8)
$ 103.8
Operating earnings for 2011 increased $25 million when compared to 2010, primarily due to higher underwriting
margins (calculated as premiums less current and future benefits) from our life and disability products, partially
offset by lower underwriting margins in our long-term care products. Operating earnings for 2010 increased $24
million when compared to 2009, primarily due to lower total operating expenses and improved underwriting
margins in our disability products which were partially offset by lower underwriting margins in our long-term care
and life products. In 2010, our underwriting margins reflect an increase in our long-term disability reserves as a
result of using a lower discount rate, reflecting lower yields in the investment portfolio supporting this business.
Our group benefit ratios, which represent current and future benefits divided by premiums, were 87.5% for 2011,
92.0% for 2010, and 91.6% for 2009.