701221--2/25/2010--CIGNA

related topics

{regulation, government, change}

{system, service, information}

{tax, income, asset}

{condition, economic, financial}

{financial, litigation, operation}

{cost, contract, operation}

{regulation, change, law}

{capital, credit, financial}

{operation, natural, condition}

{personnel, key, retain}

{operation, international, foreign}

{acquisition, growth, future}

{cost, regulation, environmental}

{gas, price, oil}

CIGNA s business depends on its ability to properly maintain the integrity or security of its data or to strategically implement new information systems. If CIGNA fails to manage successfully its outsourcing projects and key vendors, CIGNA s business could be disrupted Sustained or significant deterioration in economic conditions could significantly impact the Company s customers. 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 and affect ability to access capital. Unfavorable claims experience related to workers compensation and personal accident insurance exposures in CIGNA s Run-off Reinsurance business could result in losses CIGNA s equity hedge program for its guaranteed minimum death benefits contracts could fail to reduce the risk of stock market declines. Actual experience could differ significantly from CIGNA s assumptions used in estimating CIGNA s liabilities for reinsurance contracts covering guaranteed minimum death benefits or minimum income benefits. Significant stock market declines could result in larger net liabilities for guaranteed minimum death benefit contracts or for guaranteed minimum income benefit contracts, the recognition of additional pension obligations and increased funding for those obligations, and increased pension plan expenses. Significant changes in market interest rates affect the value of CIGNA s financial instruments that promise a fixed return or benefit and the value of particular assets and liabilities. New accounting pronouncements or guidance could require CIGNA to change the way in which it accounts for 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 operates a pharmacy benefit management business, primary care clinics and a staff model HMO, which are subject to a number of risks and uncertainties, in addition to those CIGNA faces with its health care business. CIGNA faces competitive pressure, particularly price competition, which could result in premiums which are insufficient to cover the cost of the healthcare services delivered to its members and inadequate medical claims reserves. 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, bio-terrorist activity, natural disasters or other extreme events 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 s business depends on the uninterrupted operation of its systems and business functions, including information technology and other business systems. Global market, economic and geopolitical conditions may cause fluctuations in equity market prices, interest rates and credit spreads which could impact the Company s ability to raise or deploy capital as well as affect the Company s overall liquidity. CIGNA is subject to potential changes in the political environment, which could adversely affect the markets for its products. CIGNA faces risks in successfully managing the integration of Great-West Healthcare (or any other acquisition). CIGNA faces intense competition to attract and retain key people. CIGNA would be adversely affected if its prevention, detection or control systems fail to detect and implement required changes to maintain regulatory compliance or prevent fraud. The Company s international operations face political, legal, operational, regulatory, economic and other risks that present unique challenges and could negatively affect those operations or our long-term growth.

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701221--2/25/2010--CIGNA_CORP