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Cigna Announces Transaction to Exit Run-off Operations

  Cigna Announces Transaction to Exit Run-off Operations

  *Funds transaction with Berkshire Hathaway through $100 million of
    incremental parent company cash, along with assets supporting the business
    and the related tax benefit

Business Wire

BLOOMFIELD, Conn. -- February 4, 2013

Cigna Corporation (NYSE: CI) today announced a definitive agreement with
Berkshire Hathaway Life Insurance Company of Nebraska, a member of the
Berkshire Hathaway, Inc. group (Berkshire), under which Berkshire will
reinsure Cigna's Run-off Guaranteed Minimum Death Benefits (VADBe) and
Guaranteed Minimum Income Benefits (GMIB) businesses effective February 4,
2013. Cigna will fund this transaction with an incremental $100 million of
parent company cash, approximately $1.8 billion of investment assets
supporting the run-off businesses, and an estimated $300 million tax benefit
associated with the transaction.

Berkshire will assume 100% of Cigna's exposure up to $4 billion of future
VADBe and GMIB claims, which is significantly in excess of current projections
of future claims for this business. Cigna believes that the potential for
actual claims to exceed the limit of the coverage from Berkshire is extremely
remote.

“Cigna is taking this definitive strategic step to further reduce risk and
continue to improve our financial flexibility,” said David M. Cordani,
President and Chief Executive Officer. “This transaction effectively
eliminates potential capital calls and income statement volatility from these
run-off books of business.”

Cigna expects to record the exit transaction as a special item in the first
quarter of 2013, resulting in an after-tax charge of $500 million. The charge
represents the amount of payment to Berkshire that is in excess of Cigna's
recorded reserves. Realized capital gains resulting from the sale of
investment assets supporting the business are expected to range between $50
million and $150 million after-tax, depending on whether the assets are sold
externally or transferred to other internal portfolios.

The special item charge for the exit transaction and the expected realized
capital gains on the sale of assets will be included in Cigna's net income,
but will not be included in adjusted income from operations. As a result,
Cigna's earnings outlook for 2013, which is based on adjusted income from
operations, will not be impacted by this transaction. The transaction also
does not affect Cigna's outlook regarding capital that is available for
deployment in 2013.

BofA Merrill Lynch served as financial advisors and Skadden, Arps, Slate,
Meagher & Flom LLP served as legal advisors.

Conference Call

Cigna will be hosting a conference call this afternoon, beginning at 5:00p.m.
ET to discuss the transaction. The call-in numbers for the conference call are
as follows:

Live Call
(800) 619-9569 (Domestic)
(517) 623-4948 (International)
Passcode: 999363

Replay
(800) 283-1577 (Domestic)
(402) 998-0965 (International)
No Passcode Required

It is strongly suggested you dial in to the conference call by 4:45p.m. ET.
The operator will periodically provide instructions regarding the call.

About Cigna

Cigna Corporation (NYSE: CI) is a global health service company dedicated to
helping people improve their health, well-being and sense of security. All
products and services are provided exclusively through operating subsidiaries
of Cigna Corporation, including Connecticut General Life Insurance Company,
Cigna Health and Life Insurance Company, Life Insurance Company of North
America and Cigna Life Insurance Company of New York. Such products and
services include an integrated suite of health services, such as medical,
dental, behavioral health, pharmacy and vision care benefits, and other
related products including group disability, life, and accident coverage.
Cigna has sales capability in 30 countries and jurisdictions, with
approximately 75 million customer relationships throughout the world. To learn
more about Cigna®, including links to follow us on Facebook or Twitter, visit
www.cigna.com.

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Cigna Corporation and its subsidiaries (the “Company”) and its representatives
may from time to time make written and oral forward-looking statements,
including statements contained in press releases, in the Company’s filings
with the Securities and Exchange Commission, in its reports to shareholders
and in meetings with analysts and investors. Forward-looking statements may
contain information about financial prospects, economic conditions, trends and
other uncertainties. These forward-looking statements are based on
management’s beliefs and assumptions and on information available to
management at the time the statements are or were made. Forward-looking
statements include, but are not limited to, the information concerning
possible or assumed future business strategies, financing plans, competitive
position, potential growth opportunities, potential operating performance
improvements, trends and, in particular, the Company’s strategic initiatives,
litigation and other legal matters, operational improvement initiatives in the
Health Care operations, and the outlooks for the Company’s full year 2012,
2013 and beyond results. Forward-looking statements include all statements
that are not historical facts and can be identified by the use of
forward-looking terminology such as the words “believe”, “expect”, “plan”,
“intend”, “anticipate”, “estimate”, “predict”, “potential”, “may”, “should” or
similar expressions.

By their nature, forward-looking statements: (i) speak only as of the date
they are made, (ii) are not guarantees of future performance or results and
(iii) are subject to risks, uncertainties and assumptions that are difficult
to predict or quantify. Therefore, actual results could differ materially and
adversely from those forward-looking statements as a result of a variety of
factors. Some factors that could cause actual results to differ materially
from the forward-looking statements include:

      increased medical costs that are higher than anticipated in establishing
1.   premium rates in the Company’s Global Health Care operations, including
      increased use and costs of medical services;
      increased medical, administrative, technology or other costs resulting
2.    from new legislative and regulatory requirements imposed on the
      Company’s businesses;
      challenges and risks associated with implementing improvement
      initiatives and strategic actions in the ongoing operations of the
      businesses, including those related to: (i) growth in targeted
      geographies, product lines, buying segments and distribution channels,
3.    (ii) offering products that meet emerging market needs, (iii)
      strengthening underwriting and pricing effectiveness, (iv) strengthening
      medical cost results and a growing medical customer base, (v) delivering
      quality service to members and health care professionals using effective
      technology solutions, and (vi) lowering administrative costs;
      adverse changes in state, federal and international laws and
      regulations, including health care reform legislation and regulation
4.    that could, among other items, affect the way the Company does business,
      increase costs, limit the ability to effectively estimate, price for and
      manage medical costs, and affect the Company’s products, services,
      market segments, technology and processes;
      the ability to successfully complete the integration of acquired
      businesses, including the acquired HealthSpring businesses by, among
      other things, operating Medicare Advantage coordinated care plans and
5.    HealthSpring’s prescription drug plan, retaining and growing the
      customer base, realizing revenue, expense and other synergies, renewing
      contracts on competitive terms, successfully leveraging the information
      technology platform of the acquired businesses, and retaining key
      personnel;
      the ability of the Company to execute its growth plans by successfully
      leveraging its capabilities and those of the businesses acquired in
6.    serving the Seniors market segment and the Company’s other market
      segments, including through successful execution of the Company’s
      physician engagement strategy;
      the possibility that the acquired HealthSpring business may be adversely
      affected by economic, business and/or competitive factors; or by federal
7.    and/or state regulation, including health care reform, reductions in
      funding levels for Medicare programs, and potential changes in risk
      adjustment data validation audit and payment adjustment methodology;
      risks associated with pending and potential state and federal class
      action lawsuits, disputes regarding reinsurance arrangements, other
      litigation and regulatory actions challenging the Company’s businesses,
8.    including disputes related to payments to health care professionals,
      government investigations and proceedings, tax audits and related
      litigation, and regulatory market conduct and other reviews, audits and
      investigations;
      heightened competition, particularly price competition, that could
9.    reduce product margins and constrain growth in the Company’s businesses,
      primarily the Global Health Care business;
      risks associated with the Company’s mail order pharmacy business that,
10.   among other things, includes any potential operational deficiencies or
      service issues as well as loss or suspension of state pharmacy licenses;
11.   significant changes in interest rates or sustained deterioration in the
      commercial real estate markets;
      downgrades in the financial strength ratings of the Company’s insurance
      subsidiaries, that could, among other things, adversely affect new sales
      and retention of current business; downgrades in financial strength
12.   ratings of reinsurers or adjustments to the assumptions used in
      estimating the liabilities for the Company's reinsurance contracts, that
      could result in increased statutory reserves or capital requirements of
      the Company’s insurance subsidiaries;
      limitations on the ability of the Company’s insurance subsidiaries to
13.   dividend capital to the parent company as a result of downgrades in the
      subsidiaries’ financial strength ratings, changes in statutory reserve
      or capital requirements or other financial constraints;
      risks associated with the reinsurance transaction for the run-off
      guaranteed minimum death benefits and guaranteed minimum income benefits
14.   businesses, including the risk that future liabilities exceed the cap
      under the reinsurance agreement or that the reinsurance does not
      otherwise provide adequate protection;
      significant stock market declines, that could, among other things,
15.   impact the Company’s pension plans in future periods as well as the
      recognition of additional pension obligations;
      significant deterioration in economic conditions and significant market
16.   volatility, that could have an adverse effect on the Company’s
      operations, investments, liquidity and access to capital markets;
      significant deterioration in economic conditions and significant market
      volatility, that could have an adverse effect on the businesses of our
17.   customers (including the amount and type of health care services
      provided to their workforce, loss in workforce and our customers'
      ability to pay their obligations) and our vendors (including their
      ability to provide services);
      amendments to income tax laws, that could affect the taxation of
18.   employer-provided benefits and the taxation of certain insurance
      products such as corporate-owned life insurance;
      potential public health epidemics, pandemics, natural disasters and
      bio-terrorist activity, that could, among other things, cause the
19.   Company’s covered medical and disability expenses, pharmacy costs and
      mortality experience to rise significantly, and cause operational
      disruption, depending on the severity of the event and number of
      individuals affected;
20.   risks associated with security or interruption of information systems,
      that could, among other things, cause operational disruption;
21.   challenges and risks associated with the successful management of the
      Company’s outsourcing projects or key vendors; and
22.   the unique political, legal, operational, regulatory and other
      challenges associated with expanding our business globally.

This list of important factors is not intended to be exhaustive. Other
sections of the Company’s most recent Annual Report on Form 10-K, including
the “Risk Factors” section, the Quarterly Report on Form 10-Q for the quarters
ended March 31, June 30, and September 30, 2012 and the Current Report on Form
8-K filed on August 8, 2012, and other documents filed with the Securities and
Exchange Commission include both expanded discussion of these factors and
additional risk factors and uncertainties that could preclude the Company from
realizing the forward-looking statements. The Company does not assume any
obligation to update any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.

Contact:

Cigna
Ted Detrick, 215-761-1414
Investor Relations
Edwin.Detrick@cigna.com
or
Matthew Asensio, 860-226-2599
Media Relations
Matthew.Asensio@cigna.com
 
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