Keith Gulledge Consultant Acumen Learning, LLC August 16, 2013 Cigna Q Quarterly Conference Call Review and Follow-up from Building Business Acumen Class

In conjunction with Keith Gulledge Q2-2013–Earnings Call Review Thank you for joining us! Call will last approximately one hour. Preparation: 1) Listen to the Q Earnings Call conducted on August 1, ) Fill out the Conference Call worksheet 3) Print off any documents that would be helpful as a reference (Investor Relations webpage contains the Cigna quarterly and annual financial information)

2nd Quarter 2013 Earnings Call Review Notes

Agenda – 1 Hour  Introduction & Review 5 Drivers3 min.  Key Messages & Financial Analysis50 min.  Overview  Performance: Cash, Profit, Asset, Growth, People, other factors  Analyst Questions & Discussion  Outlook and Guidance for 2013  Wrap up – Q&A 7 min. These and other workshop slides and materials available for.PDF or.PPT download at:

Earnings Call Participants  David M. Cordani—Cigna President and CEO  Thomas A. McCarthy—Cigna CFO and Executive VP  Edwin J. (“Ted”) Detrick—Cigna VP of Investor Relations  13 analysts from:  Goldman Sachs  JPMorgan Chase  Bank of America Merrill Lynch  Barclays Capital  Cowen and Company  Dowling & Partners Securities  Citigroup Inc.  Deutsche Bank  Jefferies LLC  Credit Suisse AG  Monness, Crespi, Hardt & Co.  Susquehanna Financial Group  USB Investment Bank

5 Key Drivers: Review Why is CASH important? Invest back into the business Pay Overhead Costs Acquisitions Capital Expenditures Return value to Shareholders Dividend payments Stock Repurchases Cash Balance and Cash Flow (NOT same as Profit) Profit = Revenue ▬ Expense Indicators: MCR Operating Profit Net Margin EPS Profit is a calculation per GAAP for financial and tax reporting to match Revenue and Expense MEET, EXCEED, then ANTICIPATE Customer Needs Strength Liquidity Equity to Assets Utilization ROA ROE ROI Asset Balance Employees & Customers, Clients Growth is a MEASURE and a STRATEGY 2 Types of Growth : Organic & Inorganic Importance: Investors expect Employees energized Customers attracted Executives measured CEO’s #1 Job: Grow shareholder value

Overview of Earnings Call David Cordani followed by Thomas McCarthy—Q results and operations, and Full Year 2013 outlook.  9 or 31% PROFIT – Revenue, Costs—always in context of GROWTH  4 or 14% GROWTH STRATEGY – context of PROFITS & CUSTOMERS, including questions around Segment growth, ASO & CAC, international  5 or 17% PEOPLE – Customers & Physicians, reporting segments, ASO, marketing strategies, Medicare Advantage membership  1 or 4% ASSETS – A few questions, other than about Capital deployment  2 or 7% CASH – Stock buy-back, capital deployment, investments  3 or 10% COMPETITORS – comparative marketing, cost structures  5 or 17% EXTERNAL FACTORS – Exchanges, regulations Breakdown of analysts’ questions by topics & subjects (several questions addressed more than one Driver):  13 analysts 29 questions  Dominant questions and discussion: PROFITABLE GROWTH driven by PEOPLE (Customers, Physicians, Markets)

5 Driver Integration: Discussion  CASH as an ASSET usually discussed in context of reserves, capital deployment, stock buy-back or investment for future GROWTH  PEOPLE include customers, clients, marketing strategy, and market segments— always in context of driving revenue and containing costs for PROFITABLE GROWTH  ASSETS are referenced as investments, reserves, or portfolio of products and services, or units such as HealthSpring—and always in the context of future contribution to revenue and EPS GROWTH  PROFITS discussed in context of revenue (rates) and cost categories, especially MCR and operating expense trends, always with respect to past and future GROWTH of revenue, profits and EPS  COMPETITORS & EXTERNAL FACTORS —impact on the above Dominant Drivers: GROWTH of PROFITS, MARKETS

Initial SEC Disclaimers 1.Non-GAAP financial measures are used 2.“adjusted income from operations” 3.“adjusted earnings per share” 4.Reconciliation with GAAP measures 5.“Forward looking comments”—risk factors. “Guidance” or “outlook” not “forecasts” or “projections” Management is held accountable for its outlook Formality: Ted Detrick makes standard financial disclaimers at the beginning of every call per SEC regs:

Key Messages: Outline to Analysts 1.Review of key Q results 2.How Cigna’s broad portfolio if differentiated solutions creates value for our clients, customers and shareholders 3.Forces of change and disruption 4.Overall strategies 5.Outlook and expectations for balance of Long-term outlook and strategies—3 to 5 years ─ David Cordani, CEO—Q Earnings Call “We delivered strong second quarter results in each of Cigna's ongoing businesses.”

“…“We are creating value for our customers and clients in each of our business segments through sustained investments in capabilities and innovation to deliver on our ongoing commitment to quality, service and affordability. Our performance this quarter continues Cigna’s track record of attractive financial results driven by the effective execution of our strategy across all of our business lines. Our performance this quarter continues Cigna’s track record of attractive financial results driven by the effective execution of our strategy across all of our business lines.” ─ David Cordani, CEO Q Press Release Q Summary

Cigna Q and Past Performance  Revenues UP 8% to $8.0 billion  Premiums and fees UP 8% to $7.2 billion  Adjusted Income from Operations per share UP 19% to $1.78 ($512 million total)  Global Medical Customer base UP by 443,000 people, or 3% to 14.3 million Customers over Q Overview of Q Cigna 2013 Outlook—Increased  Adjusted Income from Operations— $1.8 to $1.9 B or $6.25 to $6.65 per share  Adjusted Earnings per Share—$6.25 to $6.65 Update on Key Recent Events  Strategic partnering agreement with Catamaran for our PBM business  1.2 million monthly visitors to myCigna website  Global Supplement expansion: rollout of new Medicare supplemental products in US; encouraging results from Turkey  AMA’s National Health Insurer Report Card—Cigna ranks highest among the 7 leading commercial insurers

Overall: Tom McCarthy, CFO “Overall, this quarter is another example of the effective execution of our focus strategy and demonstrates the strong fundamentals of each of our operating businesses. The strength of these results provides us with good momentum and confidence to increase our full year financial outlook in 2013.” “Our second quarter 2013 consolidated results reflect the strength of our global portfolio of businesses and a continued track record of effective execution of our focus strategy. The fundamentals in our business remained strong as evidenced by our second quarter results, which reflected attractive growth in revenue and earnings in each of our ongoing businesses to finalization of the strategic pharmacy benefits arrangement to deliver market-leading value to customers and continued targeted strategic investments, which will enable sustained growth into the future.”

Segment Review: Q Global Health Care: 78% of Rev. fr. Ongoing Ops. a.Strong performance, all markets b.U.S. Seniors business—HealthSpring healthy c.Premiums and fees up 5% to $5.7 billion d.Adj. Earnings fr. Ops: up 10% to $403 million—favorable medical costs, strong revenue growth, operating expense efficiencies e.14.3 million global Medical customers, up 2% or 241,000 customers f.Medical costs: Lower utilization trend. U.S. Commercial guaranteed MCR 78.7% (or 79.5% excl. prior year reserve dev.) g.85% of US Commercial customers are ASO—trend continues h.Seniors medical costs: MCR for Medicare Advantage—82.9% (or 83.3% excluding prior year reserve development) i.Commercial & Seniors risk business: “Strong pricing, disciplined underwriting, effective medical mgt. & phys. engagement”

Segment Review: Q Global Supplemental Benefits a.Substantial revenue and earnings growth b.Recent acquisitions, organic growth, leverage differentiated distribution capabilities c.Premiums & fees UP 35% to $613 mill. Acquisitions: Great American Supplemental Benefits; Turkey—Finansbank JV d.Adj. Earnings fr. Ops: $49 million, 81% increase over depressed Q Group Disability and Life—strong results a.Premiums & fees UP 10% to $846 million b.Adj. Earnings fr. Ops: UP 14% to $104 million. $27 mill. Favorable claims impact from reserve study on Group Disability 4.Remaining Operations a.Run-off Reinsurance, Other and Corporate: $44 million loss after tax—primarily interest expense in Corporate b.Performance consistent with expectations

Key Messages: CASH – Q “As a result of the continued effective execution of our strategy, our second quarter results reflect strong revenue and earnings contributions from each on our ongoing businesses, as well as significant free cash flow.” “…Overall, our capital position and updated outlook are strong and reflects the underlying performance of our operating segments, and our capital deployment strategies and priorities remain unchanged.” ─ Tom McCarthy, CFO —Q Earnings Call

CASH: Capital Management Report Q Capital Deployment & 2013 Outlook $575 M Q ending Parent company Cash: $575 M $250 M Liquidity needs set aside $250 M $500 M Repurchased 7.2 mill. shares of stock thru July: $500 M $500 M Parent company Cash—expected end of 2013: $500 M $ 1.0 B Expect 2013 Cash for deployment—rest of 2013: $ 1.0 B $ 2.2 B Reinsurance premium paid to Berkshire Hathaway: $ 2.2 B $803 M Operating Cash Flow is 1.6X adjusted inc. fr. ops. $803 M “Overall, we continue to have good financial flexibility. Our subsidiaries remain well capitalized and are generating significant free cash flow to the parent, with strong return on capital in each of our ongoing businesses.” ― Tom McCarthy, CFO

CASH: Discussion Topics 1.Cash available rest of 2013 to fuel M&A Growth—$1.0 billion, net of pension funding 2.M&A strategy: Capital deployment strategy unchanged: operations, M&A, stock buy-backs to return capital to investors. 3.Healthy free cash flow to Parent

CASH Performance CIGNA CHG Cash & Cash Equivalents$ 3,209$ 2,978 8% Short-Term Investments$ 296$ 15492% Cash + S-T Investments$ 3,505$ 3,13212% 6 mos. ended:: CHG CF fr. Ops.-Bef. Special Item$ 1,473$ 1,877(22%) Special Item 1 ($2,196)-- Cash Flow from Operations($ 723)$ 1,877(139%) GROWTH Consolidated from all Segments 1 Special Item is cash paid to Berkshire Hathaway to effectively exit the Run- off Reinsurance business.

PROFIT: Discussion Topics 1.Favorable development in medical costs and disability reserves 2.Special after-tax charge of $24 million in transaction costs for Catamaran partnering agreement. Excluded from adjusted inc. ops. 3.ASO growth, profitability, trends 4.Earnings will be lower Q3 & Q4 due to “increased strategic spending”: telemarketing, affinity partners. No specifics outlook: no specifics. Results expected to be “competitively attractive for both revenue and earnings.” 6.Main factors to drive 100 bps reduction in medical cost trend: outpatient utilization 7.Guaranteed cost business: Pass through industry fee? Have disciplined pricing and underwriting; already considered

PROFIT: Discussion Topics—cont’d. 9.Disability and Life: Disability reserve study benefits. Timing in Group Disability creates “mischief.” 10.Earnings sustainability in experience-related business? Don’t give that level of detailed results. No expected change. 10.MA MLR for Q2. Most of the MLR was anticipated, planned. Anticipated conscious program changes.

PROFIT Performance Q Q CHG Total Revenues7,9807,422 8% Tot. Benefits & Exp.7,2136,834 6% Adj. Inc. from Ops % S/H Net Income % S/H Net Inc.—EPS$1.76$1.3134% Adj. Inc. fr. Ops.—EPS$1.78$1.4919% Earnings per Share (EPS) are diluted GROWTH 6 mos. ended: CHG Total Revenues$16,163$14,17614% Tot. Benefits & Exp.$ 15,322$13,03618% Adj. Inc. from Ops.$ 1,009$ 79327% S/H Net Income$ 562$ 751(25%) S/H Net Inc.—EPS$1.95$2.59(25%) Adj. Inc. fr. Ops.—EPS$3.50$2.7428%

PROFIT Performance Special Items incurred in 6 months ended Pre-tax charge related to PBM partnering agreement with Catamaran$ 37 m Pre-tax charge to exit the Run-off Reinsurance business (Berkshire transaction)$ 781 m Disability claims regulatory matter—Group Disability & Life seg. (pre-tax charge)$ 77 m Total Special Items in 6 months ended $ 895 m Reconciliation: Adjusted EPS for 6 months ended Adjusted income (loss) from operations$ 3.50 Results of GMIB business$ 0.09 Special items (after tax)($ 2.02) Net realized investment gains (after tax)$ 0.38 Shareholders’ net income$ 1.95 Special Cash item incurred in 6 months ended Cash used to exit Run-off Reinsurance business (incl. Berkshire Hathaway)$2,196 m

ASSETS: Discussion Topics 1.Pleased with results of $2.6 billion commercial loan portfolio 2.Annual review: improvement in loan-to-value ratio at 64% and improvement in debt service coverage ratios 3.Success of start-up operations in Turkey with Finansbank: “very pleased with the first year progress there.” Positive outlook. No meaningful contribution to profit for 2013.

ASSETS Performance As of: CHG Assets$53,829$53,7340.2% Liabilities$43,953$43,8510.2% Equity$ 9,775$ 9,769-- Equity Ratio18.2% -- ROE20.6%16.2%440 bps Adj. Inc.-Op.$ 2,018$ 1,58627% Equity Ratio = Equity ÷ Assets ROE uses Adj. Inc. fr. Operations GROWTH When Analysts talk about Cigna’s Assets, they are usually referring to the business portfolio of products and services, or to the business units, such as HealthSpring. 2 Adj. Inc.-Op. is annualized for ROE calculation: 6 mos. ended: = $1, = $ Liabilities includes redeemable non- controlling interests of Finansbank

“We continue to see an attractive growth outlook for Cigna over the long term.” Overall Long-term Strategy: GROWTH

GROWTH PROFIT GROWTH future conditions. Virtually every question, statement or comment was made in the context and consideration of its possible impact on PROFIT and GROWTH, including future conditions.

GROWTH Strategies 1.Positioned to win in a rapidly changing marketplace 2.“Global forces of change”—demographic, economic, legislative 3.Overall strategies:  Solutions offering differentiated value  Targeted investments for sustained future growth 4.More specifically:  Enhancements to innovative solutions and tools—PBM expansion, Catamaran  Connect to retail customer markets  Expand into new global geographies  Expand customer technology tools  Global Supplemental business—Medicare supplement products, in U.S.; Turkey is encouraging  Continued efficiencies for physician engagement partnering  CAC expansion—over 60 now. “Triple aim”: improve clinical quality, customer satisfaction, affordability

GROWTH: Discussion Topics 1.M&A priorities: Global portfolio; Seniors market, including duals; expand retail portfolio of capabilities (“retail” rather than “individual”) 2.ASO business: Competitors? Good growth over last couple of years. Over 80% of portfolio is ASO. Employers want a “more engaged wellness preventative care model with their employees.” 3.Competition in ASO business, impact on Cigna’s future? We’ll continue to be innovative. “Down market” of smaller employers—delivery platform different. See strong growth opportunities. 4.Distribution, beyond private exchanges. Movement from group to individual. Growth opportunity in supplemental and voluntary benefits—direct sales, affinity partners. We have both wholesale and retail experience. 5.Relative advantages in this market of life or health players, or both? “Don’t want to speculate.”

PEOPLE: Discussion Topics 1.Ability to grow Medicare Advantage membership next year with impact of rates 2.ASO National Account membership up or down end of year? Range from minus 1% or 2%, to plus 1%. 3.Pace of ASO conversions, 5 mos. before 2014? No meaningful employer acceleration. 4.Existing markets for seniors business. See exit (attrition) of 2% to 3% of current MA covered lives. 5.Targets for CAC expansion. 1 million lives now. Do not aggregate medical costs flowing through it. Been in space 6 years and 10 years with HealthSpring. Use CAC as preferred network in Go Deep markets. Will grow significantly. 6.Global Supplemental Benefits: Percent Turkey? Minimal in Will become big to rival Korea.

GROWTH & PEOPLE Global Health Care CHG Premiums & Fees$11,511$10,26712% Adj. Inc. fr. Ops. After Tax$ 830$ 66425% Adjusted Margin*6.6%5.9%70 bps Tot. Medical Customers14,28613,843 3% Group Disability and Life CHG Premiums & Fees$ 1,704$ 1,53011% Adj. Inc. fr. Ops. After Tax$ 153$ 159(4%) Adjusted Margin*8.2%9.5%(130 bps) Covered Lives (est.)12,10011,00010% Total Customer Relationships80,77474,151 9% Global Supplemental Benefits CHG Premiums & Fees$ 1,217$ 89935% Adj. Inc. fr. Ops. After Tax$ 104$ 7049% Adjusted Margin*8.0%7.3%70 bps Global Supple. Benefits Pols.11,7988,95432% * Adjusted Margin After Tax = Adj. Inc. fr. Ops After Tax ÷ Segment Revenues Performance by Segments 6 mos. ended: Policies & Lives in 000’s PEOPLE PEOPLE Medical customers up by 443,000 in last 12 mos. PEOPLE Benefits + Op. Exp. UP 18.5%

EXTERNAL FACTORS: Discussion Topics 1.Environment for international business. Slowdown. Have two international businesses: globally mobile population—products to corporations, government /quasi-governmental organizations (IGOs, NGOs) and targeted high net-worth individuals; and Global Supplemental business. 2.Impact of environment on small group ability to self-insure. We are highly engaged but not a targeted business for Cigna (under 50). 3.Private exchanges: many questions, much discussion—outlook over 3- 5 years? Two early to tell. We will be a player. Size of market, nature of coverage, self-insured, full risk. Will take many different forms. 4.Rollout of public exchanges under ACA: opportunities? Don’t play under 50 life or individual guarantee cost market. Pilots for last 3 years, 10 cities. Learned much.

COMPETITORS: Discussion Topics 1.Competitive landscape for ASO? No broad change. Pricing might become more competitive. 2.Medicare Advantage: Market exits due to competition? We will grow our customer base in Will see 2% to 3% exit of our covered lives. 3.Guaranteed Cost business: Pricing from competitors. No dramatic change seen.

3- to 5- Year Outlook and Strategies 3.Opportunities in U.S. retail market and global business market 4.Largest network of health care professionals in the world 5.Our “differentiated value proposition” is being well received and implemented—leverage marketing and distribution capabilities 6.Our markets:  U.S. Health  U.S. Seniors  Global Employer  Group Disability and Life  Global businesses, mobile population 7.U.S. Seniors: 10,000 people daily into Medicare--our “differentiated physician partnership model positions us to excel over long term” 1.Well positioned for future growth 2.Target annual EPS growth over next 3-5 years of 10-13% 3.Will continue our Go Deep, Go Global and Go Individual strategies 4.We will make targeted acquisitions, globally and in the US

Outlook for 2013 again increased “We have increased our outlook for 2013 again this quarter. The strength of our second quarter and our track record of effective execution of our strategy gives me confidence that we will achieve our full year outlook. “Further, our broad portfolio of products with differentiated capabilities, position in global markets with attractive growth potential gives us confidence that we will deliver competitively attractive revenue and earnings performance in 2014.” ─ David Cordani, CEO Q Earnings Call

2013 Outlook: Revised upward from Q Revenue Growth: UP 9% to 11% over Adjusted Income from Operations: $1.8 B to $1.9 B 3.Adjusted EPS: $6.25 to $6.65 (UP $0.20 to $0.25 per share) 4.Global Health Care—Earnings: $1.50 B to $1.57 B (UP $0.20 to $0.25 p.s.)  Medical Customers UP 1% to 2%  Medical Cost trend—US Commercial UP 5% to 6% (100 bps lower)  MCR—US Commercial guaranteed: UP 81.5% to 82.5% (100 bps lower)  Seniors—Medicare Advantage: MCR—82% to 83%  Operating Expense Ratio: DN 50 bps to 22.1% ( from 22.6% in 2012) 4.Global Supplemental Benefits: Strong top line growth; Earnings $180- $200 million (UP 22% to 25% over 2012). Strategic increase in operating expenses. 5.Group Disability and Life: Earnings $280 to $300 million (UP $10 million)

Summary: Cigna Q “We're pleased with our strong second quarter results. They reinforce consistent, effective execution of our Go Deep, Go Global, and Go Individual strategy, which guides our 35,000- plus Cigna colleagues around the world who work each and every day to help our customers. The combination of our clear strategy, consistent execution, outstanding team and sustained investments and capabilities positions us well to deliver competitively attractive results for the remainder of 2013 and beyond.” ─ David Cordani, CEO—Q Earnings Call

Thank you for joining the Business Acumen Earnings Call review. Encouragement & Challenge My encouragement and challenge to continue to sharpen your Business Acumen:  Quarterly review of Cigna’s financial performance— Investor Relations section of website, financial information, press release & other materials provided  Listen to quarterly Earnings Call or review transcript  Quarterly reviews of competitors, industry, economy  Continue to watch stock performance thru 2013  Implement Action Items to drive business value  Teach your teams QUESTIONS & COMMENTS?