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A.M. BEST COMPANY AFFIRMS 'A-' (EXCELLENT) RATING OF CIGNA INSURANCE GROUP

 OLDWICK, N.J., Nov. 12 /PRNewswire/ -- Effective immediately, A.M. Best Company has affirmed the "A-" (Excellent) Best's pooled rating of the CIGNA Insurance Group (property/casualty), Philadelphia, removing the rating from under review. The rating affirmation reflects Best's satisfaction with CIGNA Corporation's ongoing financial support of the group, combined with the group's continued shrinkage in business volume, will result in capital adequacy measures sufficient to maintain its "A-" Best's rating. In addition, Best is impressed with CIGNA's aggressive management of its exposure to environmental/asbestos claims and the corrective actions it has taken associated with the restructuring of its poorly performing Commercial Insurance Services business unit. The rating action applies to 19 intercompany pool members, led by the Insurance Company of North America, and two affiliates that are fully reinsured by members of the pool.
 CIGNA Corporation continues to lend strong financial support its domestic property/casualty operations. Of the $410 million of special GAAP charges related to the domestic property/casualty operations in the third quarter, approximately $185 million was not charged against the domestic property/casualty group's statutory surplus. The balance of charges were recorded by the insurance group and contributed to an approximate 20 percent decline in its statutory surplus from approximately $1.55 billion at June 30, 1993 to $1.25 billion at Sept. 30, 1993. Best is satisfied that CIGNA Corporation will maintain the group's capitalization at a sufficient level to retain its "A-" rating. CIGNA plans to raise new capital from a $300 million shelf registration within the next several months. Concurrently, we expect CIGNA to continue to downsize its domestic property/casualty operations as it restructures its Commercial Insurance Services unit, which should reduce its ongoing capital needs.
 CIGNA has developed a well-staffed and centralized major claims operation that is aggressively engaged in minimizing its exposure to ongoing environmental/asbestos claims. It has done this by employing offensive claims resolution techniques, including the pursuit of policy buy-outs and declaratory judgments to resolve coverage issues. With its recent establishment of reserves for litigation costs related to environmental/asbestos claims, the company's total reserves for environmental/asbestos claims are now in line with its peers. We are encouraged by the strong financial support CIGNA Corporation is demonstrating in this regard.
 The group's reorganization plan announced earlier this year is on schedule according to management. The redirection of the group's insurance operations largely focuses on shifting its business mix within its problematic Commercial Insurance Services unit (which accounts for 25 percent of its business) to more profitable lines. In addition, the company is cutting expenses through the restructuring of its field operations and reducing head count. A.M. Best views CIGNA's special charge for reorganization and restructuring favorably, as these actions should result in substantial cost savings, greater product recognition and a more focused commercial specialty operation in the future.
 A.M. Best had placed CIGNA Insurance Group's rating under review on Nov. 2, 1993 pending further evaluation of CIGNA's plans for restoring its domestic property/casualty operation's reduced capitalization levels, the company's ongoing exposure to environmental/asbestos claims and progress made with regard to its restructuring plan. A.M. Best is currently satisfied with the actions CIGNA is taking in these three areas. Going forward the company should be a more profitable and better capitalized insurer.
 -0- 11/12/93
 /CONTACT: Jennifer Cornish of A.M. Best Company, 908-439-2200, ext. 5150/
 (CI)


CO: CIGNA Insurance Group ST: Pennsylvania IN: INS SU: RTG

MP -- NY053 -- 3704 11/12/93 12:49 EST
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Publication:PR Newswire
Date:Nov 12, 1993
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