Managed care company Cigna Corp.'s third-quarter profit soared 92 percent, as improving equity markets spurred a big turnaround in a discontinued business that hurt the insurer last year.

Philadelphia-based Cigna said Thursday it generated $16 million in income during the quarter from variable annuity products in a segment the insurer maintains but no longer sells or markets. Those products lost $133 million in the same quarter last year.

Overall, the insurer earned $329 million, or $1.19 per share, in the three months that ended Sept. 30. That compared to $171 million, or 62 cents per share, in the same quarter of 2008.

Revenue fell 8 percent to $4.5 billion.

That translates into an overall profit margin of 7.3 percent, well above the 3.4 percent Cigna recorded last year in the third quarter but below double-digit margins seen in other industries. The insurer's margin in its health care segment, which includes employer-sponsored group health insurance, was 6.3 percent.

Insurers have been bombarded with criticism over their profits during the health care overhaul debate in Congress. Advocates of a government-created public option for health insurers say it would help trim industry profits and "keep insurance companies honest."

But insurance industry executives say they have no room in their profit margins to absorb additional costs or lower premiums triggered by a public option. Additional costs would be passed on to consumers.

For this year's third quarter, the largest publicly traded health insurers all reported better-than-expected profits. But they've also seen their health insurance enrollment shrink, as companies continue to trim jobs and reduce the number of people covered by employer-sponsored health insurance.

Cigna was no exception. It said Thursday its medical enrollment fell 7 percent to 11.1 million from the third quarter of 2008.

The insurer started the year with medical enrollment of about 11.7 million and expects a decrease of 5 to 5.5 percent in 2009, although company executives say those numbers will stabilize next year.

"While our account retention rates are strong, high unemployment levels have driven higher disenrollment, which accounts for the majority of our membership losses," said Cigna President and Chief Operating Officer David M. Cordani.

In January, Cordani will replace H. Edward Hanway as company CEO under a previously announced move.

Cigna reported an adjusted profit, which excludes one-time items, of $1.13 per share.

Analysts polled by Thomson Reuters forecasted earnings of $1.03 per share on $4.59 billion in revenue. Cigna includes results from one of its discontinued businesses in its adjusted profit, but many analysts do not in their projections. Continued...