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Tuesday, July 12, 2011

Cigna mostly left Philly years ago

Cigna Inc.'s decision to move its headquarters to Connecticut in exchange for $50 million (maybe $80 million) in taxpayer cash follows a long decline in the local profile of what used to be Philadelphia's biggest company. (Cigna says it's adding 200 more jobs in Connecticut but won't cut its 1,100 current jobs in the Philly area.) 

Cigna was created in the early 1980s merger of health insurer Connecticut General Corp. and Philadelphia's old Insurance Co. of North America (INA), the once-powerful company that invented auto insurance, among other things.

Connecticut General was the bigger company, but INA had the sharper executives, and they quickly took over. Plus Mayor Goode came through with cash to lure Cigna into Bill Rouse's Liberty Place towers and fill Cigna's vacant Arch St. headquarters (now the Phoenix apartments, and the office tower housing the EPA).

So under CEO Wilson "Bill" Taylor and successor Ed Hanway, a Media native and Willistown squire, Cigna kept its headquarters in Philadelphia.

But Cigna's share price showed the company's financial results didn't live up to its stock-market projections. And the company's heavy Center City presence evaporated at the end of the 1990s, when Cigna sold the heart of the old INA to Ace Ltd., a Bermuda- (now Switzerland-)based holding company.

Ace is thriving, and Philadelphia is now its biggest employment center. But the move, and later asset sales, as Cigna morphed from a giant multi-line insurer to a health insurer with a sometimes- tarnished reputation, left Cigna with only around 1,000 local  employees and a healthcare business run mostly from Connecticut by Hanway lieutenant David Cordani.

When Cordani succeeded Hanway two years ago as chief, without moving to Philly, the return to Connecticut was the logical next step.

What's left for Philly? Cigna still has hundreds of employees here and in suburban Voorhees.  Ace keeps growing.  And there's always Aetna, that other big for-profit health insurer, which is based in Connecticut, but still employs thousands at the old US Healthcare offices in Blue Bell. Aetna, unlike Cigna, has made significant headway as a health insurance purveyor in the Philadelphia area,
competing with Independence Blue Cross.

Maybe it's time for Aetna headquarters to reverse the Cigna commute, and move home to Philly.
Posted by Joseph N. DiStefano @ 3:15 PM  Permalink | 1 comment
Comments   
  • 0 like this / 0 don't   •   Posted 4:39 PM, 07/12/2011
    Only a dope would be in the health insurance business as it slowly dissolves into obsolescence in the face of global national health care programs. Only stupid American businesses continue to maintain, and slowly relinquish the ever increasing costs of health care on their books as an employee benefit. Only in America, does over half of all medical costs come from the private sector and they are stuck with this cost, built into the price of every product they offer,while Japan, Korea and the rest of the industrial world, have the government run this as a utility, instead of as a profit making enterprise. Everything made with a company that keeps private health insurance has to charge customers more for this left over of a by gone era.
    — Fernando08


1 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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