City shrugs off Cigna’s move

Health insurer Cigna Corp. says that most of the 1,100 employees at the Philadelphia office (shown) will stay there.
Health insurer Cigna Corp. says that most of the 1,100 employees at the Philadelphia office (shown) will stay there. (Jacqueline Larma / Associated Press file)
Posted: July 12, 2011

City officials breathed a sigh of relief Tuesday.

Cigna Corp., one of the nation's largest insurers, whose history in Philadelphia dates back to 1792, isn't packing up and moving its entire workforce here to Connecticut. It is retaining 1,100 jobs and using multiple floors of office space at Two Liberty Plaza in Center City.

Cigna executives, however, are formalizing what had already been pretty much of a done deal - moving corporate headquarters to Bloomfield, Conn., taking that state's governor up on a $50 million economic incentive to bring 200 jobs to Connecticut.

The fact that the city has lost yet another corporate flag doesn't appear to be too troubling, as long as the jobs stay here, officials say.

"It's disappointing what they are doing," said Alan Greenberger, deputy mayor for economic development. "But I don't think of it as a serious blow. They are retaining 1,100 jobs. They are retaining a lot of important functions."

David Cordani, Cigna's chief executive, called Mayor Nutter on Monday to deliver the news. By the time the call came, a day before Tuesday's noon press conference in Connecticut, there was little the city could do to change Cigna's mind.

"This was new news to us," Greenberger said. "This was quietly being planned for sometime, I assume."

Cigna's move also caught the state by surprise.

"While we regret that the corporate headquarters will be relocating to Connecticut, we are relieved by the company's statement that they plan to retain all employees at the Philadelphia facility," said Theresa Elliott, a spokeswoman for Pennsylvania's Department of Community and Economic Development.

After appearing at a press conference with Gov. Dannel P. Malloy in Connecticut at noon, Cordani traveled to Philadelphia to talk to staffers in Center City.

Cordani said that although he had been in conversations with Pennsylvania and Philadelphia officials, "we didn't do an auction per se," to see whether either the city or the state would compete with Connecticut's $50 million lure.

"This was a unique program and it really lined up nicely to where our existing employment footprint was," he said. Cigna has about 3,100 employees at its complex in Bloomfield, outside Hartford.

In order to gain the $50 million, Cigna had to promise to add 200 jobs, a cost to the state of Connecticut of $250,000 per job. Cigna can get a total of $80 million by adding a total of 800 over the next 10 years.

The company's lease at Two Liberty Place expires in 2016, and spokeswoman Gloria Barone had no comment on the company's plans at that point. She said that Cordani answered a question about the lease in Philadelphia by saying that Cigna's real estate strategy depends on changes in its businesses.

Philadelphia became Cigna's corporate headquarters in 1982, but the company's Philadelphia roots date to 1792, when a predecessor company, Insurance Company of North America, wrote marine insurance policies for a vessel named the America set to sail to Europe.

Connecticut General Insurance Corp. acquired INA in 1982, merging their businesses and their names into Cigna Corp. The headquarters was established in Philadelphia.

In the late 1990s, when a corporate move was considered, then Mayor W. Wilson Goode moved city offices into the company's space in the former INA building, now the Phoenix condominiums. That allowed Cigna to move into One Liberty Place, and later expand into Two Liberty Place.

In recent years, Cigna's employment in the city has declined and the company has never been a big player in health insurance locally, where the market is dominated by Independence Blue Cross and Aetna Inc.

Cigna had long operated as a company with two main corporate offices - one here and one in Bloomfield. Until Cordani took over for H. Edward Hanway in January 2010, the focus had been here.

Cordani and the company's other top officers now live and work in Connecticut. Hanway lived in the Philadelphia suburbs. The highest-ranking executive to remain here will be John M. Murabito, executive vice president of human resources.

Cigna's health insurance business, which is run out of Cigna's Connecticut office, accounts for just under two-thirds of Cigna's $1.35 billion profits, or $861 million.

The disability and life insurance business, which is based here, accounts for just over a fifth of the profits, or $291 million. Cigna's international business, which is also based in Philadelphia, earned $243 million in 2010 and is growing rapidly.


Contact staff writer Jane M. Von Bergen at 215-854-2769 or jvonbergen@phillynews.com.

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