Cigna’s Net Income Drops 8% on Hurricane Georges Claims

Cigna Corp. said its third-quarter earnings fell 8% as the insurance company paid out claims for damages related to Hurricane Georges.

The Philadelphia-based company, the third-biggest U.S. health insurer, said profit for the quarter, excluding investment gains, fell to $241 million from $262 million a year earlier, or 3% per share to $1.14 from $1.17. Cigna, which boosted its per-share earnings by buying back stock, was expected to earn $1.12 a share, according to analysts. Revenue edged up 0.9% to $5.23 billion.

Cigna has been focusing more on group health and life insurance and retirement plans over slower-growing individual insurance policies.

Cigna said profit from its group health and life insurance division jumped 24% to $159 million. Membership in the company’s health maintenance organization business rose about 11% to 6.45 million.

The employee retirement and savings benefit unit saw profit rise 11%, but profit plunged 78% in the property and casualty insurance division as Cigna customers experienced damage from Hurricane Georges.

Profit also fell in the individual financial services division, by 22%.

Cigna released its results after the close of trading.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* Capital Re Corp., a reinsurer of financial guaranty companies, said third-quarter earnings fell 22% to $13.0 million, or 40 cents a share, a penny higher than estimates. Losses from claims more than quadrupled in the quarter, largely because of the bankruptcy filing of hospital chain Allegheny Health, Education & Research Foundation. Revenue rose 37% to $63 million as premiums, investment income and fee income gained.

* Dow Corning Corp., a joint venture of Dow Chemical Co. and Corning Inc., said its third-quarter earnings fell 10% to $57.5 million, or $23 a share, as sales fell 4.4% to $648.2 million. The specialty chemicals maker warned that its results won’t get appreciably better until the economies of Japan and Southeast Asia recover.