Cigna 2011 Annual Report Download - page 138

116 CIGNA CORPORATION2011 Form10K
PART II
ITEM 8 Financial Statements and Supplementary Data
NOTE 22 Segment Information
e Company’s operating segments generally reect groups of related
products, except for the International segment which is generally based
on geography. In accordance with GAAP, operating segments that do not
require separate disclosure were combined in “Other Operations”. e
Company measures the nancial results of its segments using “segment
earnings (loss)”, which is dened as shareholders’ income (loss) from
continuing operations before after-tax realized investment results.
Consolidated pre-tax income from continuing operations is primarily
attributable to domestic operations. Consolidated pre-tax income from
continuing operations generated by the Company’s foreign operations
was approximately 15% in 2011, 13% in 2010 and 9% in 2009.
e Company determines segment earnings (loss) consistent with
accounting policies used in preparing the consolidated nancial
statements, except that amounts included in Corporate are not allocated
to segments. e Company allocates certain other operating expenses,
such as systems and other key corporate overhead expenses, on systematic
bases. Income taxes are generally computed as if each segment were
ling a separate income tax return. e Company does not report total
assets by segment since this is not a metric used to allocate resources
or evaluate segment performance.
e Company presents segment information as follows:
Health Care oers insured and self-insured medical, dental, behavioral
health, vision, and prescription drug benet plans, health advocacy
programs and other products and services that may be integrated to
provide comprehensive health care benet programs. Cigna HealthCare
companies oer these products and services in all 50 states, the District
of Columbia and the U.S. Virgin Islands. ese products and services
are oered through a variety of funding arrangements such as guaranteed
cost, retrospectively experience-rated and administrative services only
arrangements.
Disability and Life includes group disability, life, accident and specialty
insurance.
International includes supplemental health, life and accident
insurance products; and international health care products and services
including those oered to individuals and globally mobile employees
of multinational companies and organizations.
Run-o Reinsurance is predominantly comprised of GMDB, GMIB,
workers’ compensation and personal accident reinsurance products.
On December31,2010, the Company essentially exited from its
workers’ compensation and personal accident reinsurance business
by purchasing retrocessional coverage from a Bermuda subsidiary of
Enstar Group Limited and transferring the ongoing administration of
this business to the reinsurer.
e Company also reports results in two other categories.
Other Operations consist of:
•corporate-owned life insurance (“COLI”);
•
deferred gains recognized from the 1998 sale of the individual life
insurance and annuity business and the 2004 sale of the retirement
benets business; and
•run-o settlement annuity business.
Corporate reects amounts not allocated to other segments, such as net
interest expense (dened as interest on corporate debt less net investment
income on investments not supporting segment operations), interest
on uncertain tax positions, certain litigation matters, intersegment
eliminations, compensation cost for stock options and certain corporate
overhead expenses such as directors’ expenses.
In 2010, the Company began reporting the expense associated with
its frozen pension plans in Corporate. Prior periods were not restated
as the eect on prior periods was not material.
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