MOODY'S CONFIRMS DEBT RATINGS OF CIGNA CORPORATION, AS WELL AS FINANCIAL STRENGTH RATING OF CONNECTICUT GENERAL LIFE; RATINGS OF CIGNA'S PROPERTY & CASUALTY INSURANCE SUBSIDIARIES ARE PLACED ON REVIEW
New York, 10-02-95 -- Moody's confirmed the debt ratings of CIGNA Corporation, as well as the A1 financial strength rating of Connecticut General Life Insurance Company. Moody's also placed the Baa1 financial strength ratings of CIGNA's property/casualty insurance subsidiaries on review. The rating actions follow CIGNA's announcement of its decision to strengthen net reserves for asbestos and environmental (A&E) claims and other exposures by approximately $1.2 billion in the third quarter of 1995, and to restructure the property/casualty subsidiaries into two distinct operations -- one concentrating on ongoing business, and the other on handling the company's discontinued operations, consisting primarily of A&E claim exposures. Ratings for subsidiaries that are expected to become part of CIGNA's ongoing property/casualty operations have been placed on review for possible upgrade, whereas the Baa1 rating of one subsidiary (Century Indemnity Company) that is expected to carry the bulk of assets and A&E runoff liabilities has been placed on review for possible downgrade.
According to Moody's, CIGNA's announced reserve strengthening is consistent with the rating agency's prior estimates of the insurer's total A&E exposure, which was a significant factor in Moody's ratings downgrades of CIGNA in August 1994. Moody's added that its rating review would focus on the strategic positioning of CIGNA's ongoing property/casualty operations, on their improved operating fundamentals in light of management actions that have been taken in the recent past and prospective relief from the steady drag of reserves needed to fund A&E claims. The rating review process on Century Indemnity will focus primarily on the structure of the transaction with regard to initial funding and reinsurance, and on the adequacy of reserves for A&E exposures.
Ratings confirmed include the following:
CIGNA Corporation - senior long-term debt at Baa1, subordinated long-term debt at Baa2, rating for commercial paper at Prime-2;
Connecticut General Life Insurance Company -- insurance financial strength at A1.
CIGNA Reinsurance Company -- insurance financial strength at Baa1;
Financial strength ratings placed on review for possible upgrade include the following:
Allied Insurance Company -- Baa1
Insurance Company of North America -- Baa1
Alaska Pacific Insurance Company -- Baa1
Atlantic Employers Insurance Company -- Baa1
Bankers Standard Fire and Marine Company -- Baa1
Bankers Standard Insurance Company -- Baa1
CIGNA Employers Insurance Company -- Baa1
CIGNA Fire Underwriters Insurance Company -- Baa1
CIGNA Insurance Company -- Baa1
CIGNA Insurance Company of Illinois -- Baa1
CIGNA Insurance Company of Ohio -- Baa1
CIGNA Insurance Company of Texas -- Baa1
CIGNA Insurance Company of the Midwest -- Baa1
CIGNA Property and Casualty Insurance Company -- Baa1
Indemnity Insurance Company of North America -- Baa1
Pacific Employers Insurance Company -- Baa1.
Financial strength ratings placed on review for possible downgrade:
Century Indemnity Company -- Baa1.
CIGNA Corporation, based in Philadelphia, is a leading provider of health care, insurance and financial services in the United States, and it is also one of the largest U.S.-based international insurance organizations. CIGNA reported consolidated assets of approximately $92 billion and shareholders' equity of approximately $6.8 billion as of June 30, 1995.
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