PART I ITEM 1A Risk Factors As of February 28, 2013, the insurance financial strength ratings were as follows for the Cigna subsidiaries, Connecticut General Life Insurance Company (‘‘CGLIC’’), Life Insurance Company of North America (‘‘LINA’’) and Cigna Health & Life Insurance Company (‘‘CHLIC’’): If the equity markets and credit market experience extreme volatility and disruption, there could be downward pressure on stock prices and credit capacity for certain issuers without regard to those issuers’ underlying financial strength. Extreme disruption in the credit markets could adversely impact the Company’s availability and cost of credit in the future. In addition, unpredictable or unstable market conditions or continued pressure in the global or U.S. economy, such as the sovereign debt crisis in the European Union and uncertainty regarding the U.S. fiscal position, including with respect to the federal debt ceiling, could result in reduced opportunities to find suitable opportunities to raise capital. and uncertainty regarding the U.S. fiscal position, geopolitical issues, the availability and cost of credit and other capital, consumer spending and other factors continue to negatively impact expectations for the U.S. and global economy. Unfavorable economic conditions could cause lower enrollment in our plans and negatively impact the demand for certain of our products and services as employers try to reduce their operating costs. As a result, they may modify, delay or cancel plans to purchase the Company’s products, may make changes in the mix of products purchased that are unfavorable to the Company, or may be forced to reduce their workforces. Specifically, higher unemployment rates as a result of an economic downturn could lead to lower enrollment in the Company’s employer group plans, lower enrollment in our non-employer individual plans and a higher number of employees opting out of Cigna’s employer group plans. The adverse economic conditions could also cause employers to stop offering certain health care coverage as an employee benefit or elect to offer this coverage on a voluntary, employee-funded basis as a means to reduce their operating costs. All of these developments could lead to a decrease in Cigna’s membership levels and premium and fee revenues. Additionally, Cigna’s previous disability claim experience and industry data indicate that submitted disability claims rise under adverse economic conditions, although the impact of the current adverse economic conditions is not clear. Further, if customers are not successful in generating sufficient revenue or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to the Company. Further, our customers or potential customers may force us to compete more vigorously on factors such as price and service to retain or obtain their business. All of these could lead to a decrease in our membership levels and revenues, and could materially and adversely affect our business, results of operations and financial condition. In addition, a prolonged unfavorable economic environment could adversely impact the financial position of hospitals and other care providers, which could increase our medical costs as hospitals and other care providers attempt to maintain revenue levels in their efforts to adjust to their own economic challenges. The same conditions that may affect Cigna’s customers and network also could adversely affect its vendors, causing them to significantly and quickly increase their prices or reduce their output. Cigna’s business depends on its ability to perform its necessary business functions in an efficient and uninterrupted fashion. In November 2011, Cigna issued $2.1 billion in aggregate principal amount of senior notes to finance part of the cost for the HealthSpring acquisition. As of December 31, 2012, the Company’s outstanding long-term debt totaled $5.0 billion. Cigna’s increased debt obligations could make the Company more vulnerable to general adverse economic and industry conditions and require the Company to dedicate increased cash flow from operations to the payment of principal and interest on its debt, thereby reducing the funds it has available for other purposes, such as investments in ongoing businesses, acquisitions, dividends and stock repurchases. In these circumstances, the Company’s ability to execute on its strategy may be limited, its flexibility in planning for or reacting to changes in its business and market conditions may be reduced, or its access to capital markets may be limited such that additional capital may not be available or may only be available on unfavorable terms. The economic conditions in the U.S. and globally continue to be challenging. Continued concerns about slow economic growth, high unemployment rates, the sovereign debt crisis in the European Union Unfavorable developments in economic conditions may adversely affect our business, results of operations and financial condition. 26 CIGNA CORPORATION -  2012 Form  10-K Global market, economic and geopolitical conditions may cause fluctuations in equity market prices, interest rates and credit spreads, which could impact the Company’s ability to raise or deploy capital as well as affect the Company’s overall liquidity. (1) Includes the rating assigned, the agency’s characterization of the rating and the position of the rating in the agency’s rating scale (e.g., CGLIC’s rating by A.M. Best is the 3$^{rd}$ highest rating awarded in its scale of 16). CGLIC LINA CHLIC Insurance Ratings (1) Insurance Ratings (1) Insurance Ratings (1) A.M. Best A A A (‘‘Excellent,’’ 3$^{rd}$ of 16) (‘‘Excellent,’’ 3$^{rd}$ of 16) (‘‘Excellent,’’ 3$^{rd}$ of 16) Moody’s A2 A2 A2 (‘‘Good,’’ 6$^{th}$ of 21) (‘‘Good,’’ 6$^{th}$ of 21) (‘‘Good,’’ 6$^{th}$ of 21) S&P A A (‘‘Strong,’’ 6$^{th}$ of 21) (Not Rated) (‘‘Strong,’’ 6$^{th}$ of 21) Fitch A A (‘‘Strong,’’ 6$^{th}$ of 19) (‘‘Strong,’’ 6$^{th}$ of 19) (Not Rated)