(Updates with CEO’s comments from third paragraph.)
Oct. 12 (Bloomberg) -- Cigna Corp., a U.S. health insurer, is “perpetually” looking at acquiring companies and has the resources to make purchases of more than $1 billion, Chief Executive Officer David Cordani said today.
The company’s capital position and profit growth of 19 percent a year allow it to be “opportunistic with acquisitions,” Cordani said at a meeting with reporters in Istanbul, where Cigna obtained a license to operate in August.
The Bloomfield, Connecticut-based insurer will seek to acquire businesses worldwide that enable it to add capabilities, expand or enter new areas, Cordani said.
“We’re looking at opportunities in all of these categories, and we’re looking at them perpetually,” he said. International business is expected to grow to a third of the total from the present 20 percent within three years, excluding acquisitions, he said.
Cigna invested “tens of millions of dollars” in starting its business in Turkey, which it singled out a year ago “as the most attractive new market to enter,” Cordani said. This year, the company failed in a bid to buy Turkish insurer Deniz Emeklilik Hayat AS from Denizbank AS, Dexia SA’s Turkish arm. Metlife Inc., the biggest U.S. life insurer, agreed to buy the unit for 161.9 million euros ($224 million) in June.
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. “Turkey can achieve at least the world average in years to come,” he said.
Direct Sales Focus
Cigna, which has 75 employees in Istanbul, is focusing on individual direct sales in Turkey, where it plans to publicize its products mainly through telemarketing, the Internet and direct TV. Foreign companies have 69 percent of Turkish insurance business, according to data given out at the meeting.
The company broke even in China in little more than three years and now has 2,500 employees there, according to Bill Atwell, who heads global operations. He said he sees similar potential in Turkey.
“Demographic trends play favorably to building a very successful business here,” he said.
Cigna had revenue of $23.1 billion last year, according to Bloomberg data. The insurer has $45.7 billion in assets, including $1.6 billion in cash, its balance sheet as of last Dec. 31 showed.
The shares rose 0.4 percent to $43.62 in New York trading yesterday, extending their gain this year to 19 percent.
--Editors: Alan Purkiss, Ana Monteiro
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