Cigna 2009 Annual Report Download - page 45

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I. Investments and Investment Income
CIGNA’s investment operations provide investment management and related services primarily for CIGNA’s corporate invested
assets and the insurance-related invested assets in its General Account (“Invested Assets”). CIGNA acquires or originates, directly or
through intermediaries, various investments including private placements, public securities, commercial mortgage loans, real estate
and short-term investments. CIGNA’s Invested Assets are managed primarily by CIGNA subsidiaries and external managers with
whom CIGNA’s subsidiaries contract.
The Invested Assets comprise a majority of the combined assets of the Health Care, Disability and Life, Run-off Reinsurance and
Other Operations segments (collectively, the “Domestic Portfolios”). There are, in addition, portfolios containing Invested Assets that
consist of the assets of the International segment (collectively, the “International Portfolios”). Additionally, CIGNA subsidiaries or
external managers manage Separate Account assets on behalf of contractholders. These assets are legally segregated from the
Company's other businesses and are not included in the General Account Invested Assets. Income, gains and losses generally accrue
directly to the contractholders.
Net investment income and realized investment gains (losses) are not reported separately in the investment operations. Instead,
net investment income is included as a component of earnings for each of CIGNA’s operating segments (Health Care, Disability and
Life, Run-off Reinsurance, Other Operations and International) and Corporate, net of the expenses attributable to the investment
operations. Realized investment gains (losses) are reported for each of CIGNA’s operating segments.
Assets Under Management
CIGNA’s Invested Assets under management at December 31, 2009 totaled $19.8 billion. See Schedule I to CIGNA’s 2009
Consolidated Financial Statements on page FS-3 of this Form 10-K for more information as to the allocation to types of investments.
As of December 31, 2009, CIGNA’s separate account funds consisted of:
x $1.4 billion in separate account assets that are managed by the buyer of the retirement benefits business pursuant to reinsurance
arrangements described in the Sales of Individual Life Insurance & Annuity and Retirement Benefits Businesses sections in Note
3 to the Consolidated Financial Statements beginning on page 112 of this Form 10-K;
x $2.6 billion in separate account assets, which constitute a portion of the assets of the CIGNA Pension Plan; and
x $3.3 billion in separate account assets, which primarily support certain corporate-owned life insurance, health care and disability
and life products.
Types of Investments
CIGNA invests in a broad range of asset classes, including domestic and international fixed maturities and common stocks,
commercial mortgage loans, real estate and short-term investments. Fixed maturity investments include publicly traded and private
placement corporate bonds, government bonds, publicly traded and private placement asset-backed securities, and redeemable
preferred stocks.
For the International Portfolios, CIGNA invests primarily in publicly traded fixed maturities, short-term investments and time
deposits denominated in the currency of the relevant liabilities and surplus.
Fixed Maturities
CIGNA’s fixed maturities are 92% investment grade as determined by external rating agencies (for public investments) and by
CIGNA (for private investments). These assets are well diversified by individual holding and industry sector. For information about
below investment grade holdings, see the “Investment Assets” section of the MD&A beginning on page 87 of this Form 10-K.