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A.M. BEST PLACES CIGNA INSURANCE GROUP UNDER REVIEW

 OLDWICK, N.J., Nov. 2 /PRNewswire/ -- Effective immediately, A.M. Best Company has placed the "A-" (Excellent) Best's pooled rating of the CIGNA Insurance Group (property/casualty), Philadelphia, under review pending further evaluation of the group's ongoing exposure to environmental/asbestos claims, the progress made with regard to the group's restructuring plan announced earlier this year and a review of CIGNA's plans to contribute additional capital to its domestic property/casualty operations. The 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.
 Best's rating action follows the announcement made late yesterday by CIGNA Corporation regarding two special charges to GAAP earnings the holding company has taken aggregating $525 million on a pretax basis -- a $375 million charge relating to reserve strengthening for litigation costs of reported environmental/asbestos claims, and another $150 million charge for the reorganization and restructuring of its property/casualty home office and field operations. Nearly 80 percent, or $410 million, of these consolidated GAAP charges are related to CIGNA's domestic property/casualty operations, the balance related to its international property/casualty operations. Best estimates that these charges will result in a net reduction of approximately 20 percent in CIGNA's statutory surplus for its domestic property/casualty operations, from $1.5 billion at June 30, 1993, to $1.2 billion at September 30, 1993.
 CIGNA's reserve strengthening reflects its determination that litigation costs for reported environmental/asbestos claims can now be "reasonably estimated," a necessary condition for establishing such reserves in accordance with current accounting standards. Combined with existing reserves. CIGNA's total reserves for environmental/asbestos claims total $750 million following this action.
 "While Best considers CIGNA's reserving action a step in the right direction and on a more conservative basis than before, the group and many of its peers have environmental/asbestos exposures that are likely to periodically require reserve additions for losses and loss adjustment expenses that will emerge for many years to come," said John H. Snyder, senior vice president of Best's property/casualty division. He added, "We view CIGNA's special charge for reorganization and restructuring as favorable, since these actions should result in substantial cost savings, greater product recognition and a more focused commercial specialty operation in the future."
 CIGNA Insurance Group's (property/casualty) "A-" (Excellent) Best's pooled rating will remain under review pending our further evaluation of the company's ongoing exposure to environmental/asbestos claims, management's progress in executing its restructuring program and a review of CIGNA's plans for replenishing the pool's statutory surplus. Best expects to complete its review and remove the rating from under review over the next several weeks.
 Earlier this year, the group's parent, CIGNA Corporation, tangibly demonstrated its financial support of the domestic property/casualty operations by making a capital contribution of $150 million and suspending its dividend requirements in 1993 and possibly 1994 to bolster the unit's capitalization.
 -0- 11/2/93
 /CONTACT: John H. Snyder of A.M. Best Company, 908-439-2200, ext. 5449/


CO: CIGNA Insurance Group ST: New Jersey, Pennsylvania IN: INS SU: RTG

MP -- NY056 -- 9621 11/02/93 11:53 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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