Cigna 2013 Annual Report Download - page 64

PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
long-term relationships with each of our customers and meet their can achieve better health outcomes for our global customers and
needs throughout each stage of their lives regardless of the improve employee productivity, all while lowering the costs of health
customer’s plan type: employer-based, government-sponsored, or care for all parties.
individual coverage. As of December 31, 2013, our consolidated shareholders’ equity was
As part of this strategy, we have focused our efforts on delivering $10.6 billion, assets were $54.3 billion and we reported revenues of
innovative health and wellness solutions tailored to our employer and $32.4 billion for the year then ended. Our revenues are derived
government customers, enhancing collaboration with physicians and principally from premiums on insured products, fees from self-insured
hospitals to offer affordable, value-based high quality care to products and services, mail-order pharmacy sales, and investment
individuals and building deeper relationships with individual income.
customers through the world. Through these efforts, we believe we
Our Segments
We report the financial results of our businesses in five segments, the following three of which are the most significant:
Segment % of revenues Description
Global Health Care 78% Aggregates the Commercial and Government operating segments:
Commercial
Encompasses both our U.S. commercial and certain international health
care businesses.
Serves employers and their employees, including globally mobile
individuals, and other groups (e.g. governmental and non-governmental
organizations, unions and associations). In addition, our U.S.
commercial health care business also serves individuals.
Offers our insured and self-insured customers medical, dental,
behavioral health, vision, and prescription drug benefit plans, health
advocacy programs and other products and services that may be
integrated as part of a comprehensive global health care benefit
program.
Government
Offers Medicare Advantage, Medicare Part D and Medicaid plans.
Global Supplemental Benefits 8% This segment offers supplemental health, life and accident insurance products
in selected international markets and the U.S.
Group Disability and Life 12% This segment provides group long-term and short-term disability, group life,
accident and specialty insurance products and related services.
We also report in two other segments: Run-off Reinsurance and Other Operations, including Corporate-owned Life Insurance.
Recent Key Transactions
Over the past two years, we have entered into a number of payment of $2.2 billion. See Note 7 to the Consolidated Financial
transactions that have helped us to achieve our strategic goals by: Statements and the Run-off Reinsurance section of this MD&A for
(1) repositioning the portfolio for growth in targeted geographies, additional information. As a result of this transaction, we recorded
product lines, buying segments and distribution channels; an after-tax charge of $507 million in the first quarter of 2013 that
(2) improving our strategic and financial flexibility; and (3) pursuing is reported as a special item.
additional opportunities in high growth markets with particular focus Pharmacy Benefit Management (‘‘PBM’’) Services Agreement. In
on individuals. June 2013, we entered into a ten-year pharmacy benefit
In 2013, we completed the following transactions: management services agreement with Catamaran Corporation
(‘‘Catamaran’’). Under this agreement, we will utilize their
Run-off Operations. Prior to February 4, 2013, our Run-off technology and service platforms, prescription drug procurement
Reinsurance segment had significant exposures, primarily from our and inventory management capabilities, and order fulfillment
guaranteed minimum death benefits (‘‘GMDB’’ also known as services to lower costs and enhance our home-delivery pharmacy,
‘‘VADBe’’) and guaranteed minimum income benefits (‘‘GMIB’’) retail network contracting and claims processing services. In the
business. Effective February 4, 2013, we entered into an agreement second quarter of 2013, we recorded one-time transaction costs of
with Berkshire to reinsure future exposures for this business, net of $37 million pre-tax, primarily for advisory fees associated with this
existing retrocessional arrangements, up to a specified limit, for a
32 CIGNA CORPORATION - 2013 Form 10-K
•
•
•
•
•
•