updated 11/12/2010 1:27:22 PM ET 2010-11-12T18:27:22

Standard & Poor's Ratings Services said Friday it revised its outlook for Cigna Corp. to "stable" from "negative" due to the managed care company's performance in 2009 and the first three quarters of this year.

The ratings service also affirmed a "BBB" counterparty credit rating — its second-lowest investment grade rating — on the Philadelphia insurer. S&P said in a statement it revised the outlook because Cigna has maintained strong earnings despite low interest rates that led to losses in its run-off reinsurance businesses.

The insurer operates its variable annuity death benefit and guaranteed minimum income benefit businesses in run-off mode, meaning it seeks no new business. It discontinued the businesses in 2000, but its liabilities toward them can increase depending on how the overall market does.

The company has a pretax operating return on revenue of 9.5 percent in the first nine months of 2010 when results from the discontinued businesses are excluded, S&P noted.

"These margins are among the highest in the industry, and we believe that (Cigna's) core health insurance, group disability and life insurance, and international lines of business will continue to produce margins that will sufficiently offset any losses in its run-off reinsurance business, and that will preserve the company's overall strong earnings," S&P credit analyst Neal Freedman said in the statement.

S&P also affirmed an "A" counterparty credit and financial strength ratings for Cigna subsidiary Connecticut General Life Insurance Co.

Cigna's stock rose 15 cents to $37.15 in Friday afternoon trading.

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