Aetna 2006 Annual Report Download - page 12

Total medical, dental and pharmacy membership as of December 31, 2006 increased when compared to 2005. The
increase in medical membership was primarily due to growth in our Commercial and Medicare Advantage
membership driven by membership growth from both new and current customers. ASC medical membership
accounted for all of the membership increase within Commercial and was driven by membership growth within
existing plan sponsors and new customers, net of lapses. We believe our product offerings and our competitive
position contributed to our Commercial membership growth in 2006. Additionally, our Medicaid membership
increased in 2006 predominantly due to the expansion of our Medicaid offering in Texas.
Total dental membership increased in 2006 primarily due to membership growth from both new and current ASC
customers.
Pharmacy membership increased in 2006 primarily due to growth in our pharmacy benefit management services
and mail order operations. Our pharmacy benefit management services growth was due to the new PDP program in
2006 (refer to the discussion of Medicare results on page 8) as well as an increase in Commercial pharmacy
membership. Mail order operations reflected an increase in member utilization during 2006 also resulting from
increased sales as well as an increase in the preference by our members to use this form of delivery.
GROUP INSURANCE
Group Insurance includes primarily group life insurance products offered on a Risk basis, including basic term
group life insurance, group universal life, supplemental or voluntary programs and accidental death and
dismemberment coverage. Group Insurance also includes group disability products offered on both a Risk and an
ASC basis which consist primarily of short-term and long-term disability insurance (and products which combine
both), as well as long-term care products, which provide benefits offered to cover the cost of care in private home
settings, adult day care, assisted living or nursing facilities, primarily on a Risk basis. As a result of the Broadspire
Disability acquisition on March 31, 2006, Group Insurance also includes absence management services, including
short-term and long-term disability administration and leave management, to employers. In 2006, we announced
our intention to exit the long-term care insurance market and no longer solicit or accept new long-term care
customers. Over the next two to three years, we expect to work with our customers on an orderly transition of this
product to other carriers. We do not expect that this decision will have a material impact on our financial condition
or results of operations.
Operating Summary
(Millions) 2006 2005 2004
Premiums:
Life 1,257.6$ 1,329.1$ 1,226.4$
Disability 401.5 379.7 315.1
Long-term care 102.8 94.9 83.4
Total premiums 1,761.9 1,803.7 1,624.9
Fees and other revenue 84.6 31.6 30.6
Net investment income 294.1 293.1 274.1
Net realized capital gains 11.5 13.4 30.5
Total revenue 2,152.1 2,141.8 1,960.1
Current and future benefits 1,646.8 1,708.0 1,531.1
Operating expenses:
Selling expenses 85.3 80.2 69.1
General and administrative expenses
(1)
232.3 166.2 158.8
Total operating expenses 317.6 246.4 227.9
Amortization of other acquired intangible assets 5.2 - -
Total benefits and expenses 1,969.6 1,954.4 1,759.0
Income before income taxes 182.5 187.4 201.1
Income taxes 48.6 51.0 58.0
Net income 133.9$ 136.4$ 143.1$
(1) Includes salaries and related benefit expenses of $132.8 million in 2006, $106.6 million in 2005 and $93.4 million in 2004.
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