701221--2/23/2006--CIGNA

related topics

{regulation, government, change}

{tax, income, asset}

{cost, contract, operation}

{system, service, information}

{financial, litigation, operation}

{capital, credit, financial}

{product, market, service}

{operation, natural, condition}

{cost, regulation, environmental}

If CIGNA does not execute on its strategic initiatives, there could be a material adverse effect on CIGNA s results of operations and in certain situations, CIGNA's financial condition If CIGNA fails to properly maintain the integrity of its data or to strategically implement new information systems, there could be a material adverse effect on CIGNA s business. If premiums are insufficient to cover the cost of health care services delivered to members, or if CIGNA s estimates of medical claim reserves for its guaranteed cost and experience-rated businesses based upon estimates of future medical claims are inadequate, profitability could decline. Unfavorable claims experience related to workers compensation and personal accident insurance exposures in CIGNA s Run-off Reinsurance business could result in losses If CIGNA fails to manage successfully its outsourcing projects and key vendors, CIGNA s financial results could be harmed A downgrade in the financial strength ratings of CIGNA s insurance subsidiaries could adversely affect new sales and retention of current business, and a downgrade in CIGNA's debt ratings would increase the cost of borrowed funds. If CIGNA s program for its guaranteed minimum death benefits contracts fails to reduce the risk of stock market declines, it could have a material adverse effect on the Company s financial condition. If actual experience differs significantly from CIGNA s assumptions used in estimating CIGNA s liabilities for reinsurance contracts that guarantee minimum death benefits or minimum income benefits, it could have a material adverse effect on CIGNA s consolidated results of operations, and in certain situations, could have a material adverse effect on CIGNA's financial condition. Significant stock market declines could result in increased pension plan expenses and the recognition of additional pension obligations. Significant changes in market interest rates affect the value of CIGNA's financial instruments that promise a fixed return and, as such, could have an adverse effect on CIGNA's results of operations CIGNA faces risks related to litigation and regulatory investigations CIGNA s business is subject to substantial government regulation, which, along with new regulation, could increase its costs of doing business and could adversely affect its profitability. CIGNA faces competitive pressure, particularly price competition, which could reduce product margins and constrain growth in CIGNA s health care businesses Public perception of CIGNA's products and practices as well as of the health benefits industry, if negative, could reduce enrollment in CIGNA s health benefits programs. Large-scale public health epidemics and bio-terrorist activity could cause CIGNA s covered medical and disability expenses, pharmacy costs and mortality experience to rise significantly, and in severe circumstances, could cause operational disruption. CIGNA faces a wide range of risks, and its success depends on its ability to identify, prioritize and appropriately manage its enterprise risk exposure.

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701221--2/23/2006--CIGNA_CORP