PART I ITEM 1A Risk Factors The future performance of Cigna’s business will depend in large part on Cigna’s ability to effectively implement and execute its strategic and operational initiatives that include: (1) driving growth in targeted geographies, product lines, buying segments and distribution channels; (2) improving its strategic and financial flexibility; and (3) pursuing additional opportunities in high-growth markets with particular focus on individuals. Successful execution of these strategic and operational initiatives depends on a number of factors including: If these initiatives fail or are not executed effectively, it could harm the Company’s consolidated financial position and results of operations. For example, reducing operating expenses while maintaining the necessary resources and the Company’s talent pool is important to the Company and, if not managed effectively, could have long-term effects on the business such as failure to maintain or improve the quality of its products and limiting its ability to retain or hire key personnel. In addition, to succeed, the Company must align its organization to its strategy. Cigna must effectively integrate its operations, including its most recently acquired businesses, actively work to ensure consistency throughout the organization, and promote a global mind-set and a focus on individual customers. If the Company fails to do so, it may be unable to grow as planned, or the result of expansion may be unsatisfactory. Also, the current competitive, economic and regulatory environment will require Cigna’s organization to adapt rapidly and nimbly to new opportunities and challenges. The Company will be unable to do so if it does not make important decisions quickly, define its appetite for risk specifically, implement new governance, managerial and These factors may increase in importance as Cigna continues to expand globally, and any one of these challenges could negatively affect the Company’s operations or its long-term growth. Currently, South Korea is the single largest geographic market in Cigna’s Global As a global company, Cigna’s business is increasingly exposed to risks inherent in foreign operations. These risks, which can vary substantially by market, include political, legal, operational, regulatory, economic and other risks, including government intervention and censorship that the Company does not face in its U.S. operations. The global nature of Cigna’s business and operations presents challenges including, but not limited, to those arising from: organizational processes smoothly and communicate roles and responsibilities clearly. Business Risks Future performance of Cigna’s business will depend on the Company’s ability to execute on its strategic and operational initiatives effectively. As a global company, Cigna faces political, legal, operational, regulatory, economic and other risks that present challenges and could negatively affect its multinational operations or the Company’s long-term growth. CIGNA CORPORATION -  2012 Form  10-K 21 differentiating Cigna’s products and services from those of its competitors by leveraging its health advocacy capabilities and other strengths in targeted markets, geographies and buyer segments; GLYPH<127> developing and introducing new products or programs, particularly in response to government regulation and the increased focus on consumer directed products; GLYPH<127> identifying and introducing the proper mix or integration of products that will be accepted by the marketplace; GLYPH<127> attracting and retaining sufficient numbers of qualified employees; GLYPH<127> attracting and engaging a sufficient number of qualified partners, including physicians partners in an environment with a growing shortage of primary care physicians; GLYPH<127> effectively managing balance sheet exposures, including the Company’s pension funding obligation; GLYPH<127> improving medical cost competitiveness in targeted markets; and GLYPH<127> reducing Cigna HealthCare’s medical operating expenses to achieve sustainable benefits. GLYPH<127> general economic and political conditions. GLYPH<127> political instability or acts of war, terrorism, natural disasters, pandemics in locations where Cigna operates; and GLYPH<127> the need to provide sufficient levels of technical support in different locations; GLYPH<127> challenges associated with managing more geographically diverse operations and projects; GLYPH<127> risk associated with managing Cigna’s partner relationships in accordance with business objectives in countries where our foreign businesses voluntarily operate or are required to operate with local business partners; GLYPH<127> reliance on local sales forces for some of its operations in countries that may have labor problems and less flexible employee relationships that can be difficult and expensive to terminate, or where changes in local regulation or law may disrupt the business operations; GLYPH<127> foreign currency exchange rates and fluctuations that may have an impact on the future costs or on future sales and cash flows from the Company’s international operations, and any measures that it may implement to reduce the effect of volatile currencies and other risks of its international operations may not be effective; GLYPH<127> varying regional and geopolitical business conditions and demands; GLYPH<127> discriminatory regulation, nationalization or expropriation of assets; GLYPH<127> price controls or other pricing issues and exchange controls or other restrictions that prevent it from transferring funds from these operations out of the countries in which it operates or converting local currencies that our foreign operations hold into U.S. dollars or other currencies; GLYPH<127>