Aetna 2015 Annual Report Download - page 18

Annual Report- Page 12
The 70 basis point increase in our group benefit ratio in 2015 over the prior year is primarily due to lower
underwriting margins in our long-term care and life products partially offset by higher underwriting margins in our
disability products. The 830 basis point improvement in our group benefit ratio in 2014 over the prior year is
primarily due to higher underwriting margins, reflecting improved experience in both our life and disability
products.
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.
Operating Summary
(Millions) 2015 2014 2013
Premiums $ 32.2 $ 76.4 $ 140.0
Group annuity contract conversion premium (1) —— 99.0
Net investment income 270.1 317.1 320.4
Other revenue 9.4 9.7 9.6
Net realized capital (losses) gains (13.7) 1.6 (12.8)
Total revenue 298.0 404.8 556.2
Current and future benefits 284.2 366.7 440.2
Benefit expense on group annuity contract conversion (1) —— 99.0
General and administrative expenses 12.6 12.4 12.4
Reduction of reserve for anticipated future losses on discontinued products —— (86.0)
Total benefits and expenses 296.8 379.1 465.6
Income before income (benefits) taxes 1.2 25.7 90.6
Income (benefits) taxes (8.4) .7 21.8
Net income including non-controlling interests 9.6 25.0 68.8
Less: Net income attributable to non-controlling interests 1.5 3.3 —
Net income attributable to Aetna for Large Case Pensions $ 8.1 $ 21.7 $ 68.8
(1) In 2013, pursuant to contractual rights exercised by the contract holders, certain existing group annuity contracts converted from
participating to non-participating contracts. Upon conversion, we recorded $99.0 million of non-cash group annuity conversion
premium for these contracts and a corresponding $99.0 million non-cash benefit expense on group annuity conversion for these contracts
during 2013.
The table presented below reconciles net income attributable to Aetna to operating earnings (1) for our Large Case
Pensions segment:
(Millions) 2015 2014 2013
Net income attributable to Aetna for Large Case Pensions $ 8.1 $ 21.7 $ 68.8
Net realized capital losses (gains), net of tax 8.9 (1.0) 8.3
Reduction of reserve for anticipated future losses on discontinued products, net of tax —— (55.9)
Operating earnings for Large Case Pensions $ 17.0 $ 20.7 $ 21.2
(1) Operating earnings excludes net realized capital gains and losses, amortization of other acquired intangible assets and the other items
described in the reconciliation in Note 20 of Notes to Consolidated Financial Statements beginning on page 145.
Total revenue decreased by $107 million in 2015 compared to 2014, primarily as a result of lower net investment
income in 2015 and the discontinuance of certain services under an existing customer contract during 2014, which
resulted in a corresponding reduction in current and future benefits during 2015. Total revenue decreased by $151
million in 2014 compared to 2013, primarily as a result of group annuity contract conversion premium in 2013 and
the discontinuance of certain services under an existing customer contract during 2014, which resulted in a
corresponding reduction in total benefits and expenses during 2014.