Cigna eyes acquisitions to support global business

CIGNA is looking to make up to USD 1 billion in acquisitions, according to the company’s CEO.

US health insurer CIGNA says it is looking to make acquisitions and can afford up to USD 1 billion in purchases, according to a recent story by Benjamin Harvey in Bloomberg Businessweek.

CIGNA’s CEO, David Cordani, told reporters in Istanbul that the insurer had a strong capital position and a 19% increase in profit over last year. He said CIGNA was looking to acquire firms that would either add new capabilities or help it to expand into new areas.

Harvey quoted him as adding:

We’re looking at opportunities in all of these categories, and we’re looking at them perpetually. International business is expected to grow to a third of the total from the present 20 percent within three years, excluding acquisitions.

Earlier this year CIGNA announced its expansion into Turkey, where it hopes to tap into a growing market for private insurance. Harvey wrote that it also attempted to buy a local insurer from Dexia’s Turkish arm, but failed in the bid.

He went on to note the potential in the Turkish market:

Total life and non-life insurance premiums grew to 14.1 billion liras ($7.7 billion) in 2010, from 9.7 billion liras in 2006, according to the Turkish Treasury. Average spending on insurance is $105 per person, compared with the global average of $547 and the developed-markets average of $3,500, according to Refik Berkol, CIGNA’s Turkey CEO.

CIGNA is a global health service company serving multinational employers, international organizations and individual expatriates. It offers products in 29 countries and has some 66 million customers worldwide. A publicly traded company, CIGNA shares have been on the rise since the second half of 2010. Nonetheless, the company’s earnings are forecasted to remain relatively flat over the next two years.