Aetna 2012 Annual Report Download - page 18

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Annual Report- Page 12
Operating Summary
(Millions) 2012 2011 2010
Premiums:
Life $ 1,066.8 $ 1,034.4 $ 1,082.5
Disability 623.6 534.5 536.5
Long-term care 45.9 45.9 52.1
Total premiums 1,736.3 1,614.8 1,671.1
Fees and other revenue 105.7 100.4 105.0
Net investment income 281.2 266.0 275.1
Net realized capital gains 22.7 44.4 67.4
Total revenue 2,145.9 2,025.6 2,118.6
Current and future benefits 1,532.6 1,413.4 1,536.6
Operating expenses:
Selling expenses 89.8 77.2 78.2
General and administrative expenses 280.5 275.6 264.3
Total operating expenses 370.3 352.8 342.5
Amortization of other acquired intangible assets 4.4 5.0 6.9
Total benefits and expenses 1,907.3 1,771.2 1,886.0
Income before income taxes 238.6 254.4 232.6
Income taxes 62.3 72.6 53.0
Net income $ 176.3 $ 181.8 $ 179.6
The table presented below reconciles net income to operating earnings:
(Millions) 2012 2011 2010
Net income $ 176.3 $ 181.8 $ 179.6
Net realized capital gains (14.8) (28.8) (51.6)
Operating earnings $ 161.5 $ 153.0 $ 128.0
Operating earnings for 2012 increased $9 million when compared to 2011, primarily due to higher revenues largely
from higher net investment income related to the receipt of mortgage loan and bond prepayment fees and other
investments, which more than offset the pressure on yields from the current low interest rate environment.
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. 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 88.3% for 2012,
87.5% for 2011, and 92.0% for 2010.
LARGE CASE PENSIONS
Large Case Pensions manages a variety of retirement products (including pension and annuity products) primarily
for tax-qualified pension plans. These products provide a variety of funding and benefit payment distribution
options and other services. The Large Case Pensions segment includes certain discontinued products.