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29CIGNA CORPORATION2011 Form10K
PARTI
ITEM 1A Risk Factors
As of February23,2012, the insurance nancial strength ratings were as follows for the Cigna subsidiaries, CGLIC and Life Insurance Company
of North America (“LINA”):
CGLIC
Insurance Ratings(1)
LINA
Insurance Ratings(1)
A.M. Best A
(“Excellent,” 3rd of 16)
A
(“Excellent,” 3rd of 16)
Moody’s A2
(“Good,” 6th of 21)
A2
(“Good,” 6th of 21)
S&P A
(“Strong,” 6th of 21) (Not Rated)
Fitch A
(“Strong,” 6th of 24)
A
(“Strong,” 6th of 24)
(1) Includes the rating assigned, the agency’s characterization of the rating and the position of the rating in the agency’s rating scale (e.g., CGLIC’s rating by A.M. Best is the 3rdhighest
rating awarded in its scale of16).
Global market, economic and geopolitical conditions
may cause fluctuations in equity market prices, interest
rates and credit spreads, which could impact the
Company’s ability to raise or deploy capital as well
as affect the Company’s overall liquidity.
If the equity markets and credit market experience extreme volatility
and disruption, there could be downward pressure on stock prices
and credit capacity for certain issuers without regard to those issuers’
underlying nancial strength. Extreme disruption in the credit markets
could adversely impact the Company’s availability and cost of credit in
the future. In addition, unpredictable or unstable market conditions
or continued pressure in the global or U.S. economy could result in
reduced opportunities to nd suitable opportunities to raise capital.
In November2011, Cigna issued $2.1billion in aggregate principal
amount of senior notes to nance part of the cost for the HealthSpring
acquisition, which increased the Company’s long-term debt to $5.0billion
as of December31,2011. Cigna’s increased debt obligations could make
the Company more vulnerable to general adverse economic and industry
conditions and require the Company to dedicate increased cash ow
from operations to the payment of principal and interest on its debt,
thereby reducing the funds it has available for other purposes, such as
investments in ongoing businesses, acquisitions, dividends and stock
repurchases. In these circumstances, the Company’s ability to execute
on its strategy may be limited, its exibility in planning for or reacting
to changes in its business and market conditions may be reduced, or
its access to capital markets may be limited such that additional capital
may not be available or may only be available on unfavorable terms.
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