Cigna 2012 Annual Report Download - page 141

PART II
ITEM 8 Financial Statements and Supplementary Data
Segment Information
Effective December 31, 2012, Cigna changed its external reporting markets, primarily in Asia as well as Medicare supplemental coverage
segments to reflect the Company’s realignment of its businesses to following the 2012 acquisition of Great American Supplemental
better leverage distribution and service delivery capabilities for the Benefits.
benefit of our global clients and customers. Management believes the Group Disability and Life represents group disability, life and
realignment of its businesses will enable the Company to more accident insurance products, including certain disability and life
effectively address global health services challenges by leveraging best insurance business previously reported in the former Health Care
practices across geographies to improve the health, well being and segment.
sense of security of the global customers that the Company serves.
The changes in the Company’s internal financial reporting structure, Run-off Reinsurance is predominantly comprised of GMDB and
to support this realignment, took effect on December 31, 2012 and GMIB business. On December 31, 2010, the Company essentially
resulted in changes to our external reporting segments. The exited from its workers’ compensation and personal accident
Company’s results are now aggregated based on the nature of the reinsurance business by purchasing retrocessional coverage from a
Company’s products and services, rather than its geographies. Bermuda subsidiary of Enstar Group Limited and transferring the
ongoing administration of this business to the reinsurer.
The primary segment reporting change is that the two businesses that
comprised the former International segment (international health care The Company also reports results in two other categories.
and supplemental health, life and accident) are now reported as Other Operations consist of:
follows:
corporate-owned life insurance (‘‘COLI’’);
substantially all of the international health care business (comprised
primarily of the global health benefits business) is now reported deferred gains recognized from the 1998 sale of the individual life
with the former Health Care segment and renamed Global Health insurance and annuity business and the 2004 sale of the retirement
Care; and benefits business; and
the supplemental health, life and accident business becomes a run-off settlement annuity business.
separate reporting segment named Global Supplemental Benefits.Corporate reflects amounts not allocated to other segments, such as
As a result of these changes, the financial results of Cigna’s businesses net interest expense (defined as interest on corporate debt less net
are now reported in the following segments: investment income on investments not supporting segment
operations), interest on uncertain tax positions, certain litigation
Global Health Care aggregates the following two operating matters, intersegment eliminations, compensation cost for stock
segments: options and certain corporate overhead expenses such as directors’
The Commercial operating segment includes both the U.S. expenses.
commercial and international health care businesses that offer In 2010, the Company began reporting the expense associated with its
insured and self-insured medical, dental, behavioral health, vision, frozen pension plans in Corporate. Prior periods were not restated as
and prescription drug benefit plans, health advocacy programs and the effect on prior periods was not material.
other products and services that may be integrated to provide
comprehensive global health care benefit programs to employers The Company measures the financial results of its segments using
and their employees, including globally mobile individuals. Cigna, ‘‘segment earnings (loss)’’, which is defined as shareholders’ income
either directly or through its partners, offers some or all of these (loss) from continuing operations before after-tax realized investment
products and services in all 50 states, the District of Columbia, the results. The Company determines segment earnings (loss) consistent
U.S. Virgin Islands, Canada, Europe, the Middle East, and Asia. with accounting policies used in preparing the consolidated financial
Cigna services its globally mobile customers virtually everywhere in statements, except that amounts included in Corporate are not
the world. These products and services are offered through a variety allocated to segments. The Company allocates certain other operating
of funding arrangements such as administrative services only (ASO), expenses, such as systems and other key corporate overhead expenses,
guaranteed cost and retrospectively experience rated. on systematic bases. Income taxes are generally computed as if each
segment were filing a separate income tax return. The Company does
The Government operating segment offers Medicare Advantage not report total assets by segment since this is not a metric used to
plans to seniors in 13 states and the District of Columbia, Medicare allocate resources or evaluate segment performance.
Part D plans in all 50 states and the District of Columbia and
Medicaid plans.
Global Supplemental Benefits includes supplemental health, life
and accident insurance products offered in the U.S. and foreign
CIGNA CORPORATION - 2012 Form 10-K 119
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