content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  
                [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    For the quarterly period ended June 30, 1999
                                                   -------------
  
                                         OR
  
                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    for the transition period from _____ to _____
  
                            Commission file number 1-8323
                                                   ------
  
                                  CIGNA Corporation
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
                           Delaware                     06-1059331
               -------------------------------      -----------------
                (State or other jurisdiction         (I.R.S. Employer
             of incorporation or organization)      Identification No.)
  
                        One Liberty Place, 1650 Market Street
                          Philadelphia, Pennsylvania 19192
               ------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
          Registrant's telephone number, including area code (215) 761-1000
                                                             --------------
  
                                   Not Applicable
               ------------------------------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  
       Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  registrant was required to file such reports), and (2) has been subject to such
  filing requirements for the past 90 days.
  
                                                             Yes  _x_     No ___
  
  As of June 30, 1999, 199,121,311 shares of the issuer's Common Stock were
  outstanding.
  
  
  <PAGE>
                                  CIGNA CORPORATION
  
  
                                        INDEX
  
  
                                                                          Page No.
                                                                          --------
  
  PART I.  FINANCIAL INFORMATION
  
           Item 1.  Financial Statements
  
                    Consolidated Income Statements                           1
                    Consolidated Balance Sheets                              2
                    Consolidated Statements of Comprehensive
                       Income and Changes in Shareholders' Equity            3
                    Consolidated Statements of Cash  Flows                   4
                    Notes to Financial Statements                            5
  
           Item 2.  Management's Discussion and Analysis
                    of Financial Condition and Results of Operations         11
  
  PART II. OTHER INFORMATION
  
           Item 4. Submission of Matters to a Vote of Security Holders       23
           Item 6. Exhibits and Reports on Form 8-K                          24
  
  SIGNATURE                                                                  25
  
  EXHIBIT INDEX                                                              26
  
  
  As used herein, "CIGNA" refers to one or more of CIGNA Corporation and its
  consolidated subsidiaries.
  
  <PAGE>
  Part I.  FINANCIAL  INFORMATION
  Item 1.  Financial Statements
  -----------------------------
  
  CIGNA  CORPORATION
  CONSOLIDATED INCOME STATEMENTS
  (In millions, except per share amounts)
  
  <TABLE>
  <CAPTION>
                                                                      Three Months Ended             Six Months Ended
                                                                          June 30,                       June 30,
                                                                    1999            1998           1999            1998
  ----------------------------------------------------------------------------------------------------------------------
  <S>                                                             <C>             <C>            <C>             <C>
  REVENUES
  Premiums and fees                                               $ 3,724         $ 3,354        $ 7,311         $ 6,570
  Net investment income                                               734             789          1,455           1,578
  Other revenues                                                      226             168            404             635
  Realized investment gains                                            13              39             24              79
                                                                  -------         -------        -------         -------
      Total revenues                                                4,697           4,350          9,194           8,862
                                                                  -------         -------        -------         -------
  
  BENEFITS, LOSSES AND EXPENSES
  Benefits, losses and settlement expenses                          3,119           2,930          6,138           5,776
  Policy acquisition expenses                                          58              43            125              90
  Other operating expenses                                          1,051             992          2,094           1,928
                                                                  -------         -------        -------         -------
      Total benefits, losses and expenses                           4,228           3,965          8,357           7,794
                                                                  -------         -------        -------         -------
  
  INCOME FROM CONTINUING OPERATIONS BEFORE
      INCOME TAXES                                                    469             385            837           1,068
                                                                  -------         -------        -------         -------
  
  Income taxes (benefits):
      Current                                                         213             121            326             534
      Deferred                                                        (47)             15            (28)           (154)
                                                                  -------         -------        -------         -------
          Total taxes                                                 166             136            298             380
                                                                  -------         -------        -------         -------
  
  INCOME FROM CONTINUING OPERATIONS                                   303             249            539             688
  
  Income (loss) from discontinued operations, net of taxes            (71)             59            (28)            115
                                                                  -------         -------        -------         -------
  
  INCOME BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                                    232             308            511             803
  
  Cumulative effect of accounting change, net of taxes                 --              --            (91)             --
                                                                  -------         -------        -------         -------
  
  NET INCOME                                                      $   232         $   308        $   420         $   803
  ----------------------------------------------------------------======================================================
  
  BASIC EARNINGS PER SHARE
  Income from continuing operations                               $  1.50         $  1.16        $  2.65         $  3.20
  Income (loss) from discontinued operations, net of taxes          (0.35)           0.28          (0.14)           0.54
  ----------------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change               1.15            1.44           2.51            3.74
  Cumulative effect of accounting change, net of taxes                 --              --          (0.44)             --
  ----------------------------------------------------------------------------------------------------------------------
  Net income                                                      $  1.15         $  1.44        $  2.07         $  3.74
  ----------------------------------------------------------------======================================================
  
  DILUTED EARNINGS PER SHARE
  Income from continuing operations                               $  1.48         $  1.15        $  2.61         $  3.17
  Income (loss) from discontinued operations, net of taxes          (0.35)           0.27          (0.13)           0.53
  ----------------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change               1.13            1.42           2.48            3.70
  Cumulative effect of accounting change, net of taxes                 --              --          (0.44)             --
  ----------------------------------------------------------------------------------------------------------------------
  Net income                                                      $  1.13         $  1.42        $  2.04         $  3.70
  ----------------------------------------------------------------======================================================
  
  DIVIDENDS DECLARED PER SHARE                                    $  0.30         $  0.29        $  0.60         $  0.57
  ----------------------------------------------------------------======================================================
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                                             1
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED  BALANCE  SHEETS
  (In millions, except per share amounts)
  
  <TABLE>
  <CAPTION>
                                                                                   As of                  As of
                                                                                  June 30,            December 31,
                                                                                    1999                  1998
  --------------------------------------------------------------------------------------------------------------
  <S>                                                                              <C>                  <C>
  ASSETS
  Investments:
     Fixed maturities, at fair value (amortized cost, $22,625; $22,663)            $ 23,121             $ 24,270
     Equity securities, at fair value (cost, $263; $249)                                541                  477
     Mortgage loans                                                                  10,115                9,599
     Policy loans                                                                     3,674                6,185
     Real estate                                                                        798                  733
     Other long-term investments                                                        146                  170
     Short-term investments                                                             243                  242
                                                                                   --------             --------
         Total investments                                                           38,638               41,676
  Cash and cash equivalents                                                           1,262                1,986
  Accrued investment income                                                             556                  617
  Premiums, accounts and notes receivable                                             2,589                2,481
  Reinsurance recoverables                                                            6,737                6,666
  Deferred policy acquisition costs                                                     767                  730
  Property and equipment                                                                700                  701
  Deferred income taxes                                                               1,269                1,034
  Other assets                                                                          699                  750
  Goodwill and other intangibles                                                      2,050                2,090
  Separate account assets                                                            36,179               34,808
  Net assets of discontinued operations                                               2,000                2,351
  --------------------------------------------------------------------------------------------------------------
  
          Total assets                                                             $ 93,446             $ 95,890
  ---------------------------------------------------------------------------------=============================
  
  LIABILITIES
  Contractholder deposit funds                                                     $ 27,779             $ 30,607
  Unpaid claims and claim expenses                                                    3,639                3,392
  Future policy benefits                                                             12,141               12,510
  Unearned premiums                                                                     496                  589
                                                                                   --------             --------
           Total insurance and contractholder liabilities                            44,055               47,098
  Accounts payable, accrued expenses and other liabilities                            4,631                4,358
  Current income taxes                                                                   --                   27
  Short-term debt                                                                       307                  272
  Long-term debt                                                                      1,361                1,428
  Separate account liabilities                                                       35,751               34,430
  --------------------------------------------------------------------------------------------------------------
           Total liabilities                                                         86,105               87,613
  --------------------------------------------------------------------------------------------------------------
  
  CONTINGENCIES - NOTE 9
  
  SHAREHOLDERS' EQUITY
  Common stock (par value, $0.25; shares issued, 267; 265)                               67                   66
  Additional paid-in capital                                                          2,814                2,719
  Net unrealized appreciation, fixed maturities                         $    160             $    750
  Net unrealized appreciation, equity securities                             278                  206
  Net translation of foreign currencies                                     (223)                (114)
                                                                        --------             --------
     Accumulated other comprehensive income                                             215                  842
  Retained earnings                                                                   7,045                6,746
  Less treasury stock, at cost                                                       (2,800)              (2,096)
  --------------------------------------------------------------------------------------------------------------
           Total shareholders' equity                                                 7,341                8,277
  --------------------------------------------------------------------------------------------------------------
  
           Total liabilities and shareholders' equity                              $ 93,446             $ 95,890
  ---------------------------------------------------------------------------------=============================
  
  SHAREHOLDERS' EQUITY PER SHARE                                                   $  36.87             $  40.25
  ---------------------------------------------------------------------------------=============================
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                                         2
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN
      SHAREHOLDERS' EQUITY
  (In millions)
  <TABLE>
  <CAPTION>
  Three Months Ended June 30,                                                 1999                      1998
  -------------------------------------------------------------------------------------------------------------------
                                                                       Compre-      Share-       Compre-      Share-
                                                                       hensive     holders'      hensive     holders'
                                                                       Income      Equity        Income      Equity
  -------------------------------------------------------------------------------------------------------------------
  <S>                                                                  <C>          <C>          <C>          <C>
  Common stock                                                                      $    67                   $    66
                                                                                    -------                   -------
  
  Additional paid-in capital, April 1                                                 2,788                     2,695
    Issuance of common stock for employee benefits plans                                 26                         9
                                                                                    -------                   -------
  Additional paid-in capital, June 30                                                 2,814                     2,704
                                                                                    -------                   -------
  
  Accumulated other comprehensive income, April 1                                       503                       812
    Net unrealized appreciation (depreciation) - fixed maturities      $  (335)        (335)     $    22           22
    Net unrealized appreciation (depreciation) - equity securities          49           49           (2)          (2)
                                                                       -------                   -------
        Net unrealized appreciation (depreciation) on securities          (286)                       20
    Net translation of foreign currencies                                   (2)          (2)           3            3
                                                                       -------                   -------
            Other comprehensive income (loss)                             (288)                       23
                                                                                    -------                   -------
  Accumulated other comprehensive income, June 30                                       215                       835
                                                                                    -------                   -------
  
  Retained earnings, April 1                                                          6,873                     6,129
    Net income                                                             232          232          308          308
    Common dividends declared                                                           (60)                      (61)
                                                                                    -------                   -------
  Retained earnings, June 30                                                          7,045                     6,376
                                                                                    -------                   -------
  
  Treasury stock, April 1                                                            (2,362)                   (1,377)
    Repurchase of common stock                                                         (429)                     (260)
    Other treasury stock transactions, net                                               (9)                       (4)
                                                                                    -------                   -------
  Treasury stock, June 30                                                            (2,800)                   (1,641)
  -------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME (LOSS) AND SHAREHOLDERS' EQUITY           $   (56)     $ 7,341      $   331      $ 8,340
  ---------------------------------------------------------------------==============================================
  
  Six Months Ended June 30,
  -------------------------------------------------------------------------------------------------------------------
  Common stock, January 1                                                           $    66                   $    66
    Issuance of common stock for employee benefits plans                                  1                        --
                                                                                    -------                   -------
  Common stock, June 30                                                                  67                        66
                                                                                    -------                   -------
  
  Additional paid-in capital, January 1                                               2,719                     2,655
    Issuance of common stock for employee benefits plans                                 95                        49
                                                                                    -------                   -------
  Additional paid-in capital, June 30                                                 2,814                     2,704
                                                                                    -------                   -------
  
  Accumulated other comprehensive income, January 1                                     842                       758
    Net unrealized depreciation, fixed maturities                      $  (590)        (590)     $    (7)          (7)
    Net unrealized appreciation, equity securities                          72           72           80           80
                                                                       -------                   -------
        Net unrealized appreciation (depreciation) on securities          (518)                       73
    Net translation of foreign currencies                                 (109)        (109)           4            4
                                                                       -------                   -------
            Other comprehensive income (loss)                             (627)                       77
                                                                                    -------                   -------
  Accumulated other comprehensive income, June 30                                       215                       835
                                                                                    -------                   -------
  
  Retained earnings, January 1                                                        6,746                     5,696
    Net income                                                             420          420          803          803
    Common dividends declared                                                          (121)                     (123)
                                                                                    -------                   -------
  Retained earnings, June 30                                                          7,045                     6,376
                                                                                    -------                   -------
  
  Treasury stock, January 1                                                          (2,096)                   (1,243)
    Repurchase of common stock                                                         (658)                     (371)
    Other treasury stock transactions, net                                              (46)                      (27)
                                                                                    -------                   -------
  Treasury stock, June 30                                                            (2,800)                   (1,641)
  -------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME (LOSS) AND SHAREHOLDERS' EQUITY           $  (207)     $ 7,341      $   880      $ 8,340
  ---------------------------------------------------------------------==============================================
  </TABLE>
  The Notes to Financial Statements are an integral part of these statements.
  
                                                           3
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
  (In millions)
  
  <TABLE>
  <CAPTION>
                                                                                                Six Months Ended June 30,
                                                                                                    1999         1998
  ----------------------------------------------------------------------------------------------------------------------
  <S>                                                                                              <C>          <C>
  CASH FLOWS FROM OPERATING ACTIVITIES
      Income from continuing operations                                                            $   539      $   688
      Adjustments to reconcile income from continuing operations
          to net cash provided by (used in) operating activities:
              Insurance liabilities                                                                    324          452
              Reinsurance recoverables                                                                 (72)         (64)
              Deferred policy acquisition costs                                                        (73)         (60)
              Premiums, accounts and notes receivable                                                 (149)        (197)
              Accounts payable, accrued expenses, other liabilities and
                  current income taxes                                                                 235           18
              Deferred income taxes                                                                    (28)        (154)
              Realized investment gains                                                                (24)         (79)
              Depreciation and goodwill amortization                                                    98          108
              Gain on sale of businesses                                                              (116)        (367)
              Other, net                                                                               (24)        (192)
                                                                                                   -------      -------
                  Net cash provided by operating activities of continuing operations                   710          153
                                                                                                   -------      -------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from investments sold:
          Fixed maturities                                                                           1,303        1,948
          Equity securities                                                                             57           89
          Mortgage loans                                                                               135          556
          Other                                                                                        779          853
      Investment maturities and repayments:
          Fixed maturities                                                                           1,423        1,540
          Mortgage loans                                                                               179          348
      Investments purchased:
          Fixed maturities                                                                          (2,800)      (3,138)
          Equity securities                                                                            (61)        (193)
          Mortgage loans                                                                              (924)        (920)
          Other                                                                                       (504)      (1,485)
      Proceeds on sale of businesses                                                                   107        1,296
      Other, net                                                                                      (146)        (152)
                                                                                                   -------      -------
                  Net cash provided by (used in) investing activities of continuing operations        (452)         742
                                                                                                   -------      -------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
      Deposits and interest credited to contractholder deposit funds                                 3,608        4,419
      Withdrawals and benefit payments from contractholder deposit funds                            (3,863)      (4,805)
      Net change in short-term debt                                                                    (32)        (362)
      Repayment of long-term debt                                                                       --          (99)
      Repurchase of common stock                                                                      (633)        (366)
      Issuance of common stock                                                                          35           17
      Common dividends paid                                                                           (120)        (122)
                                                                                                   -------      -------
                  Net cash used in financing activities of continuing operations                    (1,005)      (1,318)
                                                                                                   -------      -------
  Effect of foreign currency rate changes on cash and cash equivalents                                 (13)          (2)
  Net cash (to) from discontinued operations                                                            36         (178)
  ---------------------------------------------------------------------------------------------------------------------
  Net decrease in cash and cash equivalents                                                           (724)        (603)
  Cash and cash equivalents, beginning of period                                                     1,986        1,832
  ---------------------------------------------------------------------------------------------------------------------
  
  Cash and cash equivalents, end of period                                                         $ 1,262      $ 1,229
  -------------------------------------------------------------------------------------------------====================
  
  Supplemental Disclosure of Cash Information:
      Income taxes paid, net of refunds                                                            $   281      $   478
      Interest paid                                                                                $    61      $    66
  ---------------------------------------------------------------------------------------------------------------------
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                                            4
  <PAGE>
  CIGNA CORPORATION
  NOTES TO FINANCIAL STATEMENTS
  
  
  NOTE 1 - BASIS OF PRESENTATION
  
  The consolidated  financial statements include the accounts of CIGNA Corporation
  and  all  significant   subsidiaries  (CIGNA).   These  consolidated   financial
  statements have been prepared in conformity with generally  accepted  accounting
  principles.  Certain  reclassifications  have been made to conform with the 1999
  presentation.
  
  The interim  financial  statements  are  unaudited  but include all  adjustments
  (consisting  of normal  recurring  adjustments)  necessary,  in the  opinion  of
  management, for a fair statement of financial position and results of operations
  for the period reported.
  
  The preparation of interim financial  statements  necessarily  relies heavily on
  estimates.  This and  certain  other  factors,  such as the  seasonal  nature of
  portions of the  insurance  business  as well as  competitive  and other  market
  conditions,  call for caution in  estimating  results for the full year based on
  interim results of operations.
  
  NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily related to the property and casualty business, which has been sold and
  which is reported as discontinued operations, as discussed below.
  
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting  Standards  Board (FASB) issued  Statement of
  Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
  Instruments and Hedging  Activities."  SFAS No. 133 requires that derivatives be
  reported  on the balance  sheet at fair  value.  Changes in fair value are to be
  recognized  in net income or,  for  derivatives  that are  hedging  market  risk
  related to future cash flows,  in the  accumulated  other  comprehensive  income
  section of shareholders' equity. Implementation is required by the first quarter
  of 2001,  with the  cumulative  effect of adoption  reflected  in net income and
  accumulated other comprehensive income, as appropriate. CIGNA has not determined
  the effect or timing of implementation of this pronouncement.
  
  NOTE 3 - ACQUISITIONS AND DISPOSITIONS
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  The after-tax gain
  on sale,  which  will be  recognized  in  discontinued  operations  in the third
  quarter,  was approximately  $1.2 billion.  In the second quarter of 1999, CIGNA
  began  reporting  the  sold  property  and  casualty  business  as  discontinued
  operations and reclassified prior period financial information accordingly.
  
                                         5
  <PAGE>
  Summarized financial data for the discontinued operations are outlined below:
  
  <TABLE>
  <CAPTION>
  ------------------------------------------------------------------------------------------
                                            Three Months                   Six Months
                                               Ended                         Ended
                                              June 30,                      June 30,
  (In millions)                         1999            1998           1999            1998
  ------------------------------------------------------------------------------------------
  <S>                                <C>             <C>            <C>             <C>
  Income Statement Data
  
  Revenues                              $944            $987         $1,863          $1,904
                                     ======================================================
  Income (loss) before income
       taxes                           $(110)            $86           $(48)           $171
  Income taxes (benefits)                (39)             27            (20)             56
                                     ------------------------------------------------------
  Income (loss) before
       cumulative effect of
       accounting change                $(71)            $59           $(28)           $115
  -----------------------------------======================================================
  </TABLE>
  
  -------------------------------------------------------
                                 June 30,    December 31,
  (In millions)                     1999             1998
  -------------------------------------------------------
  Balance Sheet Data
  
  Invested assets                  $7,260         $9,031
  Reinsurance recoverables          6,045          6,470
  Other assets                      7,082          6,240
                                ------------------------
  Total assets                     20,387         21,741
                                ========================
  
  Insurance liabilities            15,990         16,494
  Other liabilities                 2,397          2,896
                                ------------------------
  Total liabilities                18,387         19,390
                                ========================
  Net assets                       $2,000         $2,351
  ------------------------------========================
  
  Accumulated  other   comprehensive   income  associated  with  the  discontinued
  operations  was $24 million as of June 30, 1999 and $222  million as of December
  31, 1998.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain,  which  CIGNA  recognized  in the second  quarter,  was $43 million and is
  reported in the International Life, Health and Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining basis. CIGNA recognized $16 million of the deferred gain in the second
  quarters  of 1999 and 1998,  and $31  million and $33 million for the six months
  ended June 30, 1999 and 1998, respectively.
  
  CIGNA had other acquisitions and dispositions  during the six months of 1999 and
  1998, the effects of which were not material to the financial statements.
  
  NOTE 4 - INVESTMENTS
  
  Realized Investment Gains and Losses
  
  Realized  gains and losses on investments  of continuing  operations,  excluding
  policyholder share, were as follows:
  
  ------------------------------------------------------------------------
                                   Three Months            Six Months
                                      Ended                    Ended
                                     June 30,                 June 30,
  (In millions)                  1999        1998         1999        1998
  ------------------------------------------------------------------------
  
  Fixed maturities                 $5         $--          $10         $20
  Equity securities                 6          23           13          25
  Mortgage loans                   --          (7)          --           5
  Real Estate                       2           6            1           7
  Other                            --          17           --          22
                                ------------------------------------------
                                   13          39           24          79
  Less income taxes                 4          13            8          27
  ------------------------------------------------------------------------
  Net realized investment gains    $9         $26          $16         $52
  ------------------------------==========================================
  
  Fixed Maturities and Equity Securities
  
  Sales of available-for-sale fixed maturities and equity securities, including
  policyholder share, for continuing operations were as follows:
  
  
  <TABLE>
  <CAPTION>
  -------------------------------------------------------------------------------------
                                      Three Months                    Six Months
                                         Ended                           Ended
                                        June 30,                        June 30,
  (In millions)                   1999            1998            1999            1998
  -------------------------------------------------------------------------------------
  <S>                             <C>           <C>             <C>             <C>
  Proceeds from sales             $979          $1,162          $1,360          $2,037
  Gross gains on sales              29              70              43              97
  Gross losses on sales             (7)            (28)             (8)            (41)
  -------------------------------------------------------------------------------------
  </TABLE>
  
                                         6
  
  <PAGE>
  
  The components of net unrealized appreciation (depreciation) on securities
  (including securities of discontinued operations and excluding policyholder
  share) for the three and six months ended June 30 were as follows:
  
  -------------------------------------------------------------------------------
  (In millions)                                              1999          1998
  -------------------------------------------------------------------------------
  Three months ended June 30,
  
  Unrealized appreciation (depreciation) on
  securities held, net of taxes (benefits) of $(133)
  and $16, respectively.                                    $(249)        $  40
  
  Less gains realized in net income, net of taxes
  of $20 and $10, respectively.                                37            20
                                                            -------------------
  Net unrealized appreciation (depreciation)                $(286)        $  20
  ----------------------------------------------------------===================
  
  Six months ended June 30,
  
  Unrealized appreciation (depreciation) on
  securities held, net of taxes (benefits) of $(244)
  and $109, respectively.                                   $(454)        $ 219
  
  Less gains realized in net income, net of taxes
  of $34 and $78, respectively.                                64           146
                                                            -------------------
  Net unrealized appreciation (depreciation)                $(518)        $  73
  ----------------------------------------------------------===================
  
  
  NOTE 5 - EARNINGS PER SHARE
  <TABLE>
  <CAPTION>
  -------------------------------------------------------------------
  (Dollars in millions,                         Effect of
  except per share amounts)         Basic       Dilution     Diluted
  -------------------------------------------------------------------
  Three Months Ended June 30,
  -------------------------------------------------------------------
  1999
  -------------------------------------------------------------------
  <S>                             <C>          <C>           <C>
  Net income                      $    232           --      $    232
  --------------------------------===================================
  
  Shares (in thousands):
  
  Weighted average                 201,729           --       201,729
  
  Options and restricted
  stock grants                                    3,354         3,354
  -------------------------------------------------------------------
  
  Total shares                     201,729        3,354       205,083
  --------------------------------===================================
  Earnings per share              $   1.15     $  (0.02)     $   1.13
  --------------------------------===================================
  1998
  -------------------------------------------------------------------
  Net income                      $    308           --      $    308
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 213,831           --       213,831
  
  Options and restricted
  stock grants                                    2,715         2,715
  -------------------------------------------------------------------
  
  Total shares                     213,831        2,715       216,546
  --------------------------------===================================
  Earnings per share              $   1.44     $  (0.02)     $   1.42
  --------------------------------===================================
  
  Six Months Ended June 30,
  -------------------------------------------------------------------
  1999
  -------------------------------------------------------------------
  Net income                      $    420           --      $    420
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 203,294           --       203,294
  
  Options and restricted
  stock grants                                    3,091         3,091
  -------------------------------------------------------------------
  
  Total shares                     203,294        3,091       206,385
  --------------------------------===================================
  Earnings per share              $   2.07     $  (0.03)     $   2.04
  --------------------------------===================================
  1998
  -------------------------------------------------------------------
  Net income                      $    803           --      $    803
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 214,730           --       214,730
  
  Options and restricted
  stock grants                                    2,415         2,415
  -------------------------------------------------------------------
  
  Total shares                     214,730        2,415       217,145
  --------------------------------===================================
  Earnings per share              $   3.74     $  (0.04)     $   3.70
  --------------------------------===================================
  </TABLE>
  
  Common shares held as Treasury shares were 67,503,466 and 52,561,178 as of June
  30, 1999 and 1998, respectively.
  
                                         7
  <PAGE>
  NOTE 6 - REINSURANCE RECOVERABLES
  
  In the normal  course of business,  CIGNA's  insurance  subsidiaries  enter into
  agreements  to assume  and cede  reinsurance  with  other  insurance  companies.
  Reinsurance  is ceded  primarily  to limit  losses from large  exposures  and to
  permit recovery of a portion of direct losses,  although ceded  reinsurance does
  not relieve the originating insurer of liability.
  
  In connection  with the sale of CIGNA's  individual  life  insurance and annuity
  business (as  discussed  in Note 3), the  reinsurance  recoverable  from Lincoln
  National Corporation at June 30, 1999 was $6.0 billion.
  
  Failure of reinsurers to indemnify CIGNA, as a result of reinsurer  insolvencies
  and disputes, could result in losses. However, CIGNA does not expect charges for
  unrecoverable   reinsurance  to  have  a  material  effect  on  its  results  of
  operations, liquidity or financial condition.
  
  In CIGNA's  consolidated income statements,  premiums and fees were net of ceded
  premiums and benefits,  losses and  settlement  expenses were net of reinsurance
  recoveries as follows:
  
  ------------------------------------------------------------------------
                                   Three Months            Six Months
                                      Ended                   Ended
                                     June 30,                June 30,
    (In millions)                1999        1998        1999        1998
  ------------------------------------------------------------------------
  
  Ceded premiums:
   Individual life
     insurance and
     annuity business sold       $101        $108        $164        $221
   Other                          122         105         229         214
                                 ----------------------------------------
  Total                          $223        $213        $393        $435
                                 ----------------------------------------
  Reinsurance recoveries:
   Individual life
     insurance and
     annuity business sold       $ 77        $ 62        $ 99        $118
  Other                            66         100         154         189
                                 ----------------------------------------
  Total                          $143        $162        $253        $307
  -------------------------------========================================
  
  NOTE 7 - SEGMENT INFORMATION
  
  Operating  segments  are  based on  CIGNA's  internal  reporting  structure  and
  generally reflect  differences in products;  the International  Life, Health and
  Employee  Benefits  segment is based on geography.  CIGNA uses operating  income
  (net  income  excluding  after-tax  realized  investment  results,   results  of
  discontinued  operations  and, in 1999,  the  cumulative  effect of adopting SOP
  97-3) to measure  the  financial  results of its  segments.  Summarized  segment
  financial information was as follows:
  
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------
                                          Three Months                     Six Months
                                              Ended                           Ended
                                             June 30,                        June 30,
  (In millions)                        1999            1998            1999            1998
  -----------------------------------------------------------------------------------------
  <S>                               <C>             <C>             <C>             <C>
  Premiums and fees
    and other revenues:
  Employee Health Care,
    Life and Disability
    Benefits                        $ 3,219         $ 2,973         $ 6,355         $ 5,839
  Employee Retirement
    Benefits and Investment
    Services                             71              73             133             144
  International Life,
    Health and Employee
    Benefits                            482             309             865             587
  Other Operations                      222             189             441             684
  Corporate                             (44)            (22)            (79)            (49)
  -----------------------------------------------------------------------------------------
  Total                             $ 3,950         $ 3,522         $ 7,715         $ 7,205
  -----------------------------------------------------------------------------------------
  Income from continuing
    operations:
  Operating income (loss):
  Employee Health Care,
    Life and Disability
    Benefits                        $   173         $   143         $   330         $   274
  Employee Retirement
    Benefits and Investment
    Services                             67              60             130             121
  International Life,
    Health and Employee
    Benefits                             44               7              47              16
  Other Operations                       37              29              67             262
  Corporate                             (27)            (16)            (51)            (37)
                                   --------------------------------------------------------
  Total operating income                294             223             523             636
  Realized investment gains,
    net of taxes                          9              26              16              52
  -----------------------------------------------------------------------------------------
  Income from continuing
    operations                      $   303         $   249         $   539         $   688
  ---------------------------------========================================================
  </TABLE>
  
                                         8
  
  <PAGE>
  
  NOTE 8 - COST REDUCTION INITIATIVES
  
  In the  fourth  quarter  of  1997,  CIGNA  adopted  a  cost  reduction  plan  to
  restructure  its health care  operations,  which resulted in a pre-tax charge of
  $32 million  ($22 million  after-tax)  in the  Employee  Health  Care,  Life and
  Disability Benefits segment.  The charge consisted primarily of costs related to
  severance  and vacated  lease  space.  The cash  outlays  associated  with these
  initiatives  will continue through 1999 with most having occurred in 1998. As of
  June 30, 1999,  approximately $12 million of severance was paid to approximately
  1,400 employees.
  
  NOTE 9 - CONTINGENCIES AND OTHER MATTERS
  
  Financial Guarantees
  
  CIGNA,  through its subsidiaries,  is contingently  liable for various financial
  guarantees  provided in the  ordinary  course of business.  For  example,  CIGNA
  guarantees  the  repayment of  industrial  revenue  bonds and a minimum level of
  benefits for certain separate account contracts. In addition,  CIGNA has entered
  into specialty life reinsurance  contracts that guarantee payments for specified
  unfavorable  changes in variable  annuity  account  values  based on  underlying
  mutual fund  investments if account holders expire or elect to receive  periodic
  income payments.
  
  Although the  ultimate  outcome of any loss  contingencies  arising from CIGNA's
  financial  guarantees  may  adversely  affect  results of  operations  in future
  periods,  they are not  expected  to have a material  adverse  effect on CIGNA's
  liquidity or financial condition.
  
  Regulatory and Industry Developments
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative  and  regulatory  environment  that could affect  them.  Some of the
  changes include initiatives to:
  
  o    increase health care regulation;
  o    restrict  insurance pricing and the application of underwriting  standards;
       and
  o    revise federal tax laws.
  
  Some of the more significant issues are discussed below.
  
  Efforts at the federal and state level to increase regulation of the health care
  industry could have an adverse effect on CIGNA's health care  operations if they
  reduce  marketplace  competition and innovation,  result in increased medical or
  administrative costs or reduce product margins. Matters under consideration that
  could have an adverse effect include mandated benefits or services that increase
  costs  without  improving the quality of care,  loss of the Employee  Retirement
  Income Security Act of 1974 (ERISA) preemption of state law through  legislative
  actions and court decisions,  changes in the ERISA  regulations  governing claim
  appeal  procedures  imposing  increased  administrative  burdens  and  costs and
  restrictions on the use of prescription drug formularies. Due to the uncertainty
  associated with the timing and content of any proposals  ultimately adopted, the
  effect on CIGNA's results of operations, liquidity or financial condition cannot
  be reasonably estimated at this time.
  
  In early 1999, the Administration proposed a federal budget that would eliminate
  the  deferral  of  taxation  of  certain  statutory  income  of  life  insurance
  companies.  CIGNA has not provided for taxes on $450 million of such income.  If
  the proposal is enacted, CIGNA will record additional income tax expense of $158
  million for the  resulting  liability.  The proposed  federal  budget also would
  limit  the  deduction  of  interest  expense  on  the  general  indebtedness  of
  corporations owning non-leveraged corporate life insurance policies covering the
  lives of officers,  employees or directors who are not 20 percent  owners of the
  corporation.  If this latter  provision is enacted as  proposed,  CIGNA does not
  anticipate  that it will have a material effect on its  consolidated  results of
  operations, liquidity, or financial condition, although it could have a material
  adverse effect on the results of operations of the Employee  Retirement Benefits
  and Investment Services segment.
  
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance  products.  CIGNA does not expect this  legislation to have a material
  adverse effect on its
  
                                         9
  
  <PAGE>
  
  consolidated results of operations, liquidity or financial condition.
  
  In 1998,  the National  Association  of Insurance  Commissioners  (NAIC) adopted
  risk-based capital guidelines for health maintenance organizations (HMOs). CIGNA
  expects its HMO subsidiaries to be adequately capitalized under these guidelines
  as they become effective in various jurisdictions in 1999.
  
  In 1998, the NAIC adopted standardized  statutory accounting  principles.  Since
  these  principles have not been adopted by most of the insurance  departments of
  various jurisdictions in which CIGNA's insurance subsidiaries are domiciled, the
  timing and effects of implementation have not yet been determined.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains uncertain.
  
  Litigation
  
  CIGNA is continuously  involved in numerous lawsuits arising, for the most part,
  in the ordinary course of the business of  administering  and insuring  employee
  benefits programs.  While the outcome of litigation cannot be determined,  CIGNA
  does not expect that litigation  currently  threatened or pending will result in
  losses that differ from  recorded  reserves by amounts that would be material to
  results of operations, liquidity or financial condition.
  
  Brazilian Investment
  
  CIGNA is  currently  evaluating  alternatives  relative to its  investment  in a
  Brazilian health care operation. This evaluation could result in changes in this
  operation  and  a  possible  impairment  of up to  approximately  $325  million,
  representing  the carrying value of the investment as of July 31, 1999 and other
  costs.  A decision is expected  later in 1999.  While CIGNA does not expect that
  any charges  resulting from this evaluation will be material to its liquidity or
  financial  condition,  they  could be  material  to  CIGNA's  future  results of
  operations.
  
                                         10
  <PAGE>
  Item 2.       Management's Discussion and Analysis of
                Financial Condition and Results of Operations
  
  
  INTRODUCTION
  
  The following  discussion addresses the financial condition of CIGNA Corporation
  (CIGNA) as of June 30, 1999, compared with December 31, 1998, and its results of
  operations for the quarter and six months ended June 30, 1999, compared with the
  same periods  last year.  This  discussion  should be read in  conjunction  with
  Management's  Discussion and Analysis  included in CIGNA's 1998 Annual Report to
  Shareholders  (pages 10  through  24),  to which  the  reader  is  directed  for
  additional  information.  Due to the  seasonality of certain  aspects of CIGNA's
  business,  caution should be used in estimating  results for the full year based
  on interim results of operations.
  
  Acquisitions and Dispositions
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  The after-tax gain
  on sale,  which  will be  recognized  in  discontinued  operations  in the third
  quarter, was approximately $1.2 billion.  CIGNA's priorities for use of capital,
  including proceeds from the sale, are internal growth,  acquisitions,  and share
  repurchases.
  
  In the second  quarter of 1999,  CIGNA began  reporting  the sold  property  and
  casualty  business as  discontinued  operations  and  reclassified  prior period
  financial information accordingly.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain,  which  CIGNA  recognized  in the second  quarter,  was $43 million and is
  reported in the International Life, Health and Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining basis. CIGNA recognized $16 million of the deferred gain in the second
  quarters  of 1999 and 1998,  and $31  million and $33 million for the six months
  ended June 30, 1999 and 1998, respectively.
  
  CIGNA continues to conduct  strategic and financial reviews of its businesses in
  order to  deploy  its  capital  most  effectively.  See  page 16 for  discussion
  regarding CIGNA's Brazilian  investments and Note 3 to the Financial  Statements
  for additional information on acquisitions and dispositions.
  
  Cost Reduction Initiatives
  
  In the  fourth  quarter  of  1997,  CIGNA  adopted  a  cost  reduction  plan  to
  restructure  its health care  operations,  which resulted in a pre-tax charge of
  $32 million  ($22 million  after-tax)  in the  Employee  Health  Care,  Life and
  Disability Benefits segment.  The charge consisted primarily of costs related to
  severance  and vacated  lease  space.  The cash  outlays  associated  with these
  initiatives  will continue through 1999 with most having occurred in 1998. These
  initiatives  are expected to result in annual  after-tax  expense savings of $50
  million with approximately  two-thirds of the savings having emerged in 1998 and
  the full amount expected in 1999.
  
  See  Note 8 to the  Financial  Statements  for  additional  information  on cost
  reduction initiatives.
  
  Other Matters
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative  and  regulatory  environment  that could affect  them.  Some of the
  changes include initiatives to:
  
  o    increase health care regulation;
  o    restrict  insurance pricing and the application of underwriting  standards;
       and
  o    revise federal tax laws.
  
  In early 1999, the Administration proposed a federal budget that would eliminate
  the  deferral  of  taxation  of  certain  statutory  income  of  life  insurance
  companies.  As discussed in Note 9 to the
  
                                         11
  <PAGE>
  
  Financial  Statements,  CIGNA has not provided for taxes on $450 million of such
  income.  If the  proposal is enacted,  CIGNA will record  additional  income tax
  expense of $158 million for the resulting liability. The proposed federal budget
  also would limit the deduction of interest  expense on the general  indebtedness
  of corporations owning non-leveraged  corporate life insurance policies covering
  the lives of officers,  employees or directors who are not 20 percent  owners of
  the corporation. If this latter provision is enacted as proposed, CIGNA does not
  anticipate  that it will have a material effect on its  consolidated  results of
  operations, liquidity, or financial condition, although it could have a material
  adverse effect on the results of operations of the Employee  Retirement Benefits
  and Investment Services segment.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains  uncertain.  For  additional  information,  see Note 9 to the  Financial
  Statements.
  
  Recent Accounting Pronouncements
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily related to the property and casualty business, which has been sold and
  which is reported as discontinued operations, as discussed above.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations,  liquidity or financial condition.  In
  1998,  the  Financial  Accounting  Standards  Board (FASB)  issued  Statement of
  Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
  Instruments and Hedging  Activities."  SFAS No. 133 requires that derivatives be
  reported  on the balance  sheet at fair  value.  Changes in fair value are to be
  recognized  in net income or,  for  derivatives  that are  hedging  market  risk
  related to future cash flows,  in the  accumulated  other  comprehensive  income
  section of shareholders' equity. Implementation is required by the first quarter
  of 2001,  with the  cumulative  effect of adoption  reflected  in net income and
  accumulated other comprehensive income, as appropriate. CIGNA has not determined
  the effect or timing of implementation of this pronouncement.
  
  CONSOLIDATED RESULTS OF OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                        Ended                      Ended
                                       June 30,                   June 30,
  (In millions)                  1999          1998          1999          1998
  --------------------------------------------------------------------------------
  CONTINUING
  OPERATIONS:
  Premiums and fees            $3,724        $3,354        $7,311        $6,570
  Net investment income           734           789         1,455         1,578
  Other revenues                  226           168           404           635
  Realized investment
    gains                          13            39            24            79
                              -------------------------------------------------
  Total revenues                4,697         4,350         9,194         8,862
  Benefits and expenses         4,228         3,965         8,357         7,794
                              -------------------------------------------------
  Income before taxes             469           385           837         1,068
  Income taxes                    166           136           298           380
                              -------------------------------------------------
  Income from
    continuing operations         303           249           539           688
  Less realized
    investment gains,
    net of taxes                    9            26            16            52
  ------------------------------------------------------------------------------
  Operating income*            $  294        $  223        $  523        $  636
  ----------------------------=================================================
  
  CIGNA's consolidated operating income (as defined in the footnote below) for the
  second quarter of 1999 included a $43 million  after-tax gain  recognized on the
  sale of a 29% interest in its Japanese life  insurance  operations.  For the six
  months  of  1998,  operating  income  included  a $202  million  after-tax  gain
  recognized  on the  sale  of  CIGNA's  individual  life  insurance  and  annuity
  
  ____________________
  * Operating  income (loss) is defined as net income (loss)  excluding  after-tax
  realized  investment  results,  the results of  discontinued  operations and, in
  1999, the cumulative effect of adopting a new accounting pronouncement.
  
                                         12
  
  <PAGE>
  
  business.  Excluding  these  items,  operating  income was $251 million and $480
  million for the second  quarter and six months of 1999,  respectively,  compared
  with $223 million and $434 million for the same periods last year.  The increase
  for the second quarter and six month periods primarily reflects improved results
  in CIGNA's Employee Health Care, Life and Disability Benefits segment.
  
  After-tax realized investment results of the continuing operations decreased 65%
  and 69% in the second  quarter  and six months of 1999  versus the same  periods
  last year. These decreases primarily reflect lower gains on sales of real estate
  partnerships and equity securities.  For additional  information,  see Note 4 to
  the Financial Statements.
  
  Excluding the $43 million and $202 million after-tax gains mentioned above, full
  year operating income (which excludes results of discontinued operations and the
  gain on sale of the property  and  casualty  business) is expected to improve in
  1999 over 1998;  however,  such improvement  could be adversely  affected by the
  factors noted in the cautionary statement on page 22.
  
  EMPLOYEE HEALTH CARE, LIFE AND DISABILITY BENEFITS
  
  ------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                       Ended                       Ended
                                      June 30,                   June 30,
  (In millions)                  1999          1998          1999          1998
  ------------------------------------------------------------------------------
  Premiums and fees            $3,064        $2,836        $6,040        $5,573
  Net investment income           149           142           287           285
  Other revenues                  155           137           315           266
                              --------------------------------------------------
  Segment revenues              3,368         3,115         6,642         6,124
  Benefits and expenses         3,103         2,889         6,133         5,690
                              --------------------------------------------------
  Income before taxes             265           226           509           434
  Income taxes                     92            83           179           160
                              --------------------------------------------------
  Operating income             $  173        $  143        $  330        $  274
  ----------------------------==================================================
  Realized investment
  gains, net of taxes          $    3        $   18        $    9        $   36
  ----------------------------==================================================
  
  Operating  income for the Employee  Health Care,  Life and  Disability  Benefits
  segment  increased  21% and 20% for the second  quarter  and six months of 1999,
  compared with the same periods last year. Operating income for the Indemnity and
  HMO operations was as follows:
  
  ------------------------------------------------------------------------
                                 Three Months            Six Months
                                    Ended                  Ended
                                   June 30,               June 30,
  (In millions)               1999        1998        1999        1998
  ------------------------------------------------------------------------
  Indemnity operations        $ 78        $ 73        $141        $142
  HMO operations                95          70         189         132
  ------------------------------------------------------------------------
  Total                       $173        $143        $330        $274
  ========================================================================
  
  Indemnity  operating income increased 7% for the second quarter and decreased 1%
  for the six months of 1999  compared  with the same  periods  last  year.  These
  changes primarily reflect improved guaranteed cost medical claims experience and
  improved  group life business  partially  offset for the second quarter and more
  than  offset for the six months of 1999 by lower  earnings  on  experience-rated
  medical  business.
  
  HMO operating  results for the second quarter and six months of 1999 include net
  favorable  after-tax  adjustments  of $6 million and $12 million  resulting from
  account and tax  reviews.  HMO results for the second  quarter and six months of
  1998 include net unfavorable  after-tax  adjustments of $6 million primarily for
  uncollectible  receivables of a health care service  business.  Excluding  these
  adjustments,  HMO  results  were $89  million  and $177  million  for the second
  quarter and six months of 1999, respectively, compared with $76 million and $138
  million  for the  same  periods  last  year.  These  improvements  reflect  rate
  increases  for  guaranteed  cost HMO business,  improved  results in health care
  services   operations,   and  membership  growth  in  HMO  experience-rated  and
  alternative funding business.
  
  Premiums  and fees  increased  8% for the second  quarter and six months of 1999
  compared to the same periods last year.  These increases  primarily  reflect HMO
  and medical indemnity membership growth and rate increases.
  
                                         13
  <PAGE>
  
  Net investment  income increased 5% and 1% for the second quarter and six months
  of 1999  compared to the same  periods of 1998.  For the  quarter,  the increase
  reflects growth in invested  assets and higher  investment  yields.  For the six
  months, the growth in assets was partially offset by lower investment yields.
  
  As of June 30,  1999,  total  HMO  membership  was  approximately  6.6  million,
  representing  an increase of 4% since June 30,  1998 and 2% since  December  31,
  1998. These increases  primarily reflect  membership growth in  experience-rated
  and alternative  funding  programs,  partially  offset by declines in guaranteed
  cost HMO membership.  Under alternative  funding programs,  the customer assumes
  all or a portion of the  responsibility  for funding claims, and CIGNA generally
  earns a lower margin than under traditional programs.
  
  Management  believes  that  adding  premium  equivalents  to  premiums  and fees
  (adjusted  premiums  and fees)  produces a more  meaningful  measure of business
  volume.  Premium  equivalents  generally represent paid claims under alternative
  funding programs, such as minimum premium and Administrative Services Only (ASO)
  plans.  Premium  equivalents  for the second quarter and six months of 1999 were
  $3.9 billion and $7.4 billion,  respectively.  These amounts represent increases
  of 21% and 16%  compared  with the  same  periods  last  year.  These  increases
  primarily reflect HMO and PPO membership  growth.  Premium  equivalents were 55%
  and 53% of total adjusted premiums and fees for the six months of 1999 and 1998,
  respectively.   Premium   equivalents   related  to  ASO  plans   accounted  for
  approximately 51% and 49% of total adjusted premiums and fees for the six months
  of 1999 and 1998.
  
  
   EMPLOYEE RETIREMENT BENEFITS AND INVESTMENT SERVICES
  
  -----------------------------------------------------------------------
  FINANCIAL SUMMARY               Three Months            Six Months
                                     Ended                  Ended
                                    June 30,               June 30,
  (In millions)                1999        1998        1999        1998
  -----------------------------------------------------------------------
  
  Premiums and fees            $ 71        $ 73        $133        $144
  Net investment income         403         414         790         824
                              -----------------------------------------
  Segment revenues              474         487         923         968
  Benefits and expenses         375         397         731         789
                              -----------------------------------------
  Income before taxes            99          90         192         179
  Income taxes                   32          30          62          58
                              -----------------------------------------
  Operating income             $ 67        $ 60        $130        $121
  ----------------------------=========================================
  Realized investment
  gains, net of taxes          $  6        $  7        $  7        $ 13
  ----------------------------=========================================
  
  Operating income for the Employee  Retirement  Benefits and Investment  Services
  segment  includes  favorable  non-recurring   adjustments  totaling  $3  million
  after-tax in the second quarter and six months of 1999.  Excluding  these items,
  results  for the  second  quarter  and six  months  of 1999,  were $64 and $127,
  respectively,  compared with $60 and $121 for the same periods last year.  These
  increases  in 1999 over 1998 reflect  higher  earnings  from an increased  asset
  base,  partially  offset by a shift to lower margin products  (separate  account
  equity funds).
  
  Premiums and fees for the second quarter and six months of 1999 decreased 3% and
  8%, respectively, compared with the same periods last year, reflecting a decline
  in annuity sales partially offset by higher fees from separate accounts.
  
  Net investment  income decreased 3% and 4% for the second quarter and six months
  of 1999,  primarily  reflecting lower investment yields and customers' continued
  redirection  of a portion  of their  investments  from the  general  account  to
  separate accounts.
  
                                         14
  
  <PAGE>
  
  Assets under  management  are generally a key  determinant  of earnings for this
  segment.  For the six months ended June 30, assets under  management and related
  activity, including amounts attributable to separate accounts, were as follows:
  
  --------------------------------------------------------------------
  (In millions)                                 1999             1998
  --------------------------------------------------------------------
  Balance - January 1                       $ 52,929         $ 48,231
  Premiums and deposits                        4,063            4,079
  Investment results                           1,913            1,585
  Increase in fair value of assets               594            2,006
  Customer withdrawals                        (2,994)          (2,271)
  Other, including participant
    withdrawals and benefit payments          (2,772)          (2,962)
  --------------------------------------------------------------------
   Balance - June 30                        $ 53,733         $ 50,668
  ====================================================================
  
  For the six months of 1999 and 1998, approximately 64% and 53%, respectively, of
  premiums and deposits reflect recurring  deposits from existing  customers while
  the  remaining  amounts  represent  sales to new customers and new plan sales to
  existing customers.  Investment results increased 21% in the six months of 1999,
  compared with the same period in 1998.  This increase  reflects  higher realized
  capital gains and growth in assets, partially offset by lower investment yields.
  The fair value of assets  increased  less in 1999 than in 1998  primarily due to
  lower net  appreciation  of separate  accounts and market value  depreciation of
  general  account  fixed  maturities.  The  increase in customer  withdrawals  is
  primarily due to the effect of withdrawals under defined  contribution  business
  in the first quarter of 1999.
  
  Assets  under   management   will  continue  to  be  affected  by  market  value
  fluctuations for fixed maturities and equity securities.
  
  See Other Matters on page 11 for additional information regarding corporate life
  insurance.
  
   INTERNATIONAL LIFE, HEALTH AND EMPLOYEE BENEFITS
  
  -----------------------------------------------------------------------------
  FINANCIAL SUMMARY                Three Months               Six Months
                                      Ended                      Ended
                                     June 30,                   June 30,
  (In millions)                 1999          1998         1999          1998
  -----------------------------------------------------------------------------
  
  Premiums and fees            $ 416         $ 309        $ 794         $ 586
  Net investment income           32            29           62            56
  Other revenues                  66            --           71             1
                              -----------------------------------------------
  Segment revenues               514           338          927           643
  Benefits and expenses          441           327          846           618
                              -----------------------------------------------
  Income before taxes             73            11           81            25
  Income taxes                    29             4           34             9
                              -----------------------------------------------
  Operating income             $  44         $   7        $  47         $  16
  ----------------------------===============================================
  Realized investment
  losses, net of taxes         $  (1)          $--        $  (1)          $--
  ----------------------------===============================================
  
  Results for the International Life, Health and Employee Benefits segment for the
  second quarter and six months of 1999 include a pre-tax gain of $66 million ($43
  million after-tax)  included in Other Revenues from the April 1999 sale of a 29%
  interest  in  CIGNA's  Japanese  life  insurance  operations.  Operating  income
  associated  with the 29%  interest  that was sold was $2  million  for the first
  quarter of 1999; $3 million and $5 million for the second quarter and six months
  of 1998, respectively; and $10 million for the full year of 1998.
  
  Excluding the gain on sale noted above,  operating  income was $1 million and $4
  million  for the  second  quarter  and six  months  of 1999,  respectively.  The
  declines from the same periods last year are primarily attributable to losses in
  the 1999 periods of $8 million and $15 million  after-tax from Brazilian  health
  care  operations.  CIGNA's  health care  operations in Brazil  include a managed
  health care business, which is being consolidated,  and an investment in another
  health care operation, which is being accounted for under the equity method.
  
                                         15
  <PAGE>
  
  Premiums and fees  increased  35% for the second  quarter and six months of 1999
  compared with the same periods last year.  Excluding  premiums and fees from the
  Brazilian  managed  health care business  (which is being  consolidated  and was
  acquired  in the  second  half of 1998)  and the  effects  of  foreign  currency
  changes,  premiums and fees  increased 24% for the second quarter and six months
  of 1999.  These increases  reflect growth in Japanese life insurance  operations
  and, to a lesser extent, growth in life and group benefits business in Southeast
  Asia as well as higher health care premiums and fees for expatriate employees of
  multinational companies.
  
  Net  investment  income for the second  quarter and six months of 1999 increased
  10% and 11%,  respectively,  compared with the same periods last year. Excluding
  the  effects  of  foreign  currency  changes,   the  increase  was  9%  and  7%,
  respectively. These increases reflect growth in invested assets partially offset
  by lower yields.
  
  CIGNA has expanded its  international  operations,  principally  in Brazil,  and
  expects to continue to pursue  international  growth  through  acquisitions  and
  other  investments.  CIGNA  expects this growth to result in start-up  costs and
  initial losses.
  
  CIGNA is  continuing  efforts to improve  results in its  Brazilian  health care
  operations, including initiatives to improve the pricing of medical products and
  services and to provide for enhanced medical cost controls.
  
  In  addition,  CIGNA  is  currently  evaluating  alternatives  relative  to  its
  investment in the Brazilian  health care  operation  that is accounted for under
  the equity method.  This evaluation  could result in changes in this health care
  operation  and  a  possible  impairment  of up to  approximately  $325  million,
  representing  the carrying value of the investment as of July 31, 1999 and other
  costs.  A decision is expected  later in 1999.  While CIGNA does not expect that
  any charges  resulting from this evaluation will be material to its liquidity or
  financial  condition,  they  could be  material  to  CIGNA's  future  results of
  operations.
  
  OTHER OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                        Ended                     Ended
                                       June 30,                  June 30,
  (In millions)                  1999          1998          1999          1998
  --------------------------------------------------------------------------------
  
  Premiums and fees            $  173        $  136        $  344        $  267
  Net investment income           146           196           307           394
  Other revenues                   49            53            97           417
                             --------------------------------------------------
  Segment revenues                368           385           748         1,078
  Benefits and expenses           311           344           645           675
                             --------------------------------------------------
  Income before taxes              57            41           103           403
  Income taxes                     20            12            36           141
                             --------------------------------------------------
  Operating income             $   37        $   29        $   67        $  262
  ---------------------------==================================================
  Realized investment
  gains, net of taxes          $    1        $    1        $    1        $    3
  ---------------------------==================================================
  
  Other Operations consist of:
  
  o    gain  recognition  related to the sale of the individual life insurance and
       annuity business;
  o    corporate life insurance on which policy loans are  outstanding  (leveraged
       corporate life insurance);
  o    life, accident and health reinsurance operations;
  o    settlement annuity business; and
  o    certain new business initiatives.
  
  Operating  income for the six months of 1998 includes an after-tax  gain of $202
  million  recognized  on the sale of the  individual  life  insurance and annuity
  business.  The gain was $316 million on a pre-tax basis and is reported in Other
  Revenues. Excluding this amount, operating income for the second quarter and six
  months of 1999 was $37  million and $67  million,  respectively,  compared  with
  operating  income of $29 million and $60 million for the second  quarter and six
  months of 1998. The 1999 increases reflect growth in accident and specialty life
  reinsurance products.
  
  For the second  quarter and six months of 1999,  premiums and fees increased 27%
  and 29% from the same periods of 1998.  These  increases  also reflect growth in
  accident and specialty life reinsurance  products  partially offset by declining
  health reinsurance premiums.
  
  Net  investment  income  decreased  26% and 22% for the second  quarter  and six
  months of 1999 compared with the same periods of 1998. These decreases primarily
  reflect lower assets from leveraged  corporate life insurance,  and, to a lesser
  extent, lower yields.
  
                                         16
  
  <PAGE>
  
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance  products.  For the second quarter and six months of 1999, revenues of
  $82 million and $190 million, and operating income of $9 million and $19 million
  were from products that are affected by this legislation.  CIGNA does not expect
  this legislation to have a material  adverse effect on its consolidated  results
  of operations, liquidity or financial condition.
  
  The specialty life reinsurance  products of this segment include  contracts that
  guarantee payments for specified unfavorable changes in variable annuity account
  values based on underlying  mutual fund investments if account holders expire or
  elect to  receive  periodic  income  payments.  Although  these  guarantees  may
  adversely affect CIGNA's  consolidated  results of operations in future periods,
  they are not expected to have a material adverse effect on CIGNA's  liquidity or
  financial condition.
  
  The  personal   accident   reinsurance   business  of  this   segment   includes
  participation in a workers'  compensation  program managed by Unicover Managers,
  Inc. where disputes have arisen regarding retrocessional coverage. Resolution of
  these disputes is likely to take several  years.  CIGNA does not expect to incur
  losses  material  to  its  consolidated  results  of  operations,  liquidity  or
  financial condition related to this program.
  
  CORPORATE
  
  --------------------------------------------------------------------------
  FINANCIAL SUMMARY         Three Months               Six Months
                               Ended                      Ended
                              June 30,                   June 30,
  (In millions)          1999          1998          1999          1998
  --------------------------------------------------------------------------
  Operating loss        $ (27)        $ (16)        $ (51)        $ (37)
  ----------------------====================================================
  
  Corporate is used to report amounts not allocated to segments,  such as interest
  expense and  intersegment  eliminations.  The increases in the operating loss in
  the second quarter and six months of 1999 primarily  reflect higher  unallocated
  expenses  and lower net  investment  income  due to a  reduction  in  investment
  assets.  Results for all periods include  certain  corporate  overhead  expenses
  which previously had been allocated to the property and casualty operations.
  
  PROPERTY AND CASUALTY DISCONTINUED OPERATIONS
  
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------
  FINANCIAL SUMMARY                        Three Months                    Six Months
                                              Ended                           Ended
                                             June 30,                       June 30,
  (In millions)                        1999            1998           1999            1998
  -----------------------------------------------------------------------------------------
  <S>                               <C>             <C>            <C>             <C>
  Premiums and fees                 $   735         $   761        $ 1,411         $ 1,446
  Net investment income                 131             153            268             301
  Other revenues                         61              65            136             130
  Realized investment gains              17               8             48              27
                                   -------------------------------------------------------
  Total revenues                        944             987          1,863           1,904
  Benefits and expenses               1,054             901          1,911           1,733
                                   -------------------------------------------------------
  Income (loss) before taxes           (110)             86            (48)            171
  Income taxes (benefits)               (39)             27            (20)             56
  ----------------------------------------------------------------------------------------
  Income (loss) from
    discontinued operations         $   (71)        $    59        $   (28)        $   115
  --------------------------------========================================================
  </TABLE>
  
  On July 2, 1999, CIGNA sold its property and casualty business. See Acquisitions
  and  Dispositions  on page 11 for additional  information.  Amounts in the table
  above are excluded from CIGNA's results of continuing operations.
  
  The decline in results of the discontinued  operations for the second quarter of
  1999 compared with the prior year is primarily  attributable  to a charge of $67
  million  after-tax  resulting  from  account and other  financial  reviews of an
  insurance-related  service business. The decline also reflects unfavorable claim
  experience,  lower  results from  insurance-related  service  business,  and the
  effects  of  continued  competitive  conditions  in the  property  and  casualty
  insurance markets.
  
  For the six months of 1999,  the decline also  reflects  unfavorable  prior year
  loss development in the international property and casualty operations primarily
  related to catastrophe losses.
  
  The  adverse  pre-tax  effects of prior year  development  on the results of the
  discontinued  operations were $64 million and $50 million for the second quarter
  of 1999 and 1998 (including asbestos and environmental losses of $40 million and
  $27  million  for the same  periods).  For the six months of 1999 and 1998,  the
  adverse  pre-tax effects were $131 million and $98 million  (including  asbestos
  and environmental losses of $81 million and $52 million for the same periods).
  
                                         17
  <PAGE>
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity  for CIGNA  and its  insurance  subsidiaries  has  remained  strong as
  evidenced by  significant  amounts of short-term  investments  and cash and cash
  equivalents   in  the  aggregate.   Generally,   CIGNA  has  met  its  operating
  requirements  by maintaining  appropriate  levels of liquidity in its investment
  portfolio and through utilization of overall positive cash flows.
  
  For the six months of 1999, cash and cash  equivalents of continuing  operations
  decreased  approximately $700 million from $2.0 billion as of December 31, 1998.
  This decrease  primarily  reflects  payments of dividends on and  repurchases of
  CIGNA common stock ($753  million),  cash used for  investing  activities  ($452
  million),  and net withdrawals from contractholder deposit funds ($255 million),
  partially  offset  by cash  provided  by  operating  activities  ($710  million)
  reflecting earnings and the timing of operating cash receipts and disbursements.
  
  On July 2, 1999,  CIGNA  received $3.45 billion in cash upon closing of the sale
  of its property and casualty business.
  
  CIGNA's  capital  resources  represent  funds  available for long-term  business
  commitments.  They primarily  consist of retained earnings and proceeds from the
  issuance of long-term debt and equity  securities.  CIGNA's  financial  strength
  provides the capacity and flexibility to enable it to raise funds in the capital
  markets  through the  issuance of such  securities.  CIGNA  continues to be well
  capitalized, with sufficient borrowing capacity to meet the anticipated needs of
  its businesses.
  
  CIGNA had $1.4  billion of long-term  debt  outstanding  at June 30,  1999,  and
  December  31,  1998.  As of June 30, 1999,  CIGNA had  approximately  $1 billion
  remaining  under  effective  shelf   registration   statements  filed  with  the
  Securities and Exchange Commission that may be issued as debt securities, equity
  securities  or both,  depending  upon  market  conditions  and  CIGNA's  capital
  requirements.
  
  At June 30, 1999, CIGNA's short-term debt amounted to $307 million,  an increase
  of $35 million from December 31, 1998.
  
  CIGNA has  repurchased  approximately  8,766,000  shares of its common stock for
  $770 million  during  1999,  including  1,237,500  shares  repurchased  for $112
  million from July 1 through July 31, 1999.  On July 28, 1999,  CIGNA's  Board of
  Directors  authorized an additional $1 billion of share  repurchases.  The total
  remaining authorization as of July 31, 1999 was $1.02 billion.
  
  INVESTMENT ASSETS - CONTINUING OPERATIONS
  
  ------------------------------------------------------------
                                       June 30,  December 31,
  (In millions)                           1999           1998
  ------------------------------------------------------------
  Fixed maturities                     $23,121        $24,270
  Equity securities                        541            477
  Mortgage loans                        10,115          9,599
  Real estate                              798            733
  Other, primarily policy loans          4,063          6,597
  ------------------------------------------------------------
  Total investment assets              $38,638        $41,676
  ============================================================
  
  Additional information regarding CIGNA's investment assets is included in Note 4
  to the second quarter 1999 Financial Statements and Notes 2, 4 and 5 to the 1998
  Financial Statements as well as the 1998 Form 10-K.
  
  Investment  assets as of June 30, 1999 decreased 7% from December 31, 1998. This
  decrease  primarily  reflects a decline of approximately  $2.4 billion in policy
  loans due to surrenders of leveraged  corporate  life  insurance  policies and a
  reduction in the fair value of fixed  maturities of  approximately  $1.1 billion
  due to increases in interest rates.
  
  Significant   amounts  of  CIGNA's   investment   assets  are   attributable  to
  experience-rated   contracts  with   policyholders   (policyholder   contracts).
  Approximate  percentages of investments  attributable to policyholder  contracts
  were as follows:
  
  --------------------------------------------
                     June 30,   December 31,
                        1999           1998
  --------------------------------------------
  Fixed maturities        40%           39%
  Mortgage loans          58%           57%
  Real estate             65%           63%
  --------------------------------------------
  
                                         18
  <PAGE>
  
  
  Fixed Maturities
  
  Investments in fixed  maturities  (bonds)  include  publicly  traded and private
  placement debt securities;  asset-backed  securities,  including  collateralized
  mortgage obligations (CMOs); and redeemable preferred stocks.
  
  As of June 30, 1999, the fair value of fixed maturities,  including policyholder
  share,  was greater than  amortized  cost by $496  million,  compared  with $1.6
  billion as of December 31, 1998.  The decrease is primarily  attributable  to an
  increase in interest rates during the six months of 1999.
  
       Potential Problem and Problem Bonds
  
  Potential  problem  bonds are fully  current  but judged by  management  to have
  certain  characteristics that increase the likelihood of problem classification.
  CIGNA had $54 million of potential problem bonds, including amounts attributable
  to policyholder  contracts, as of June 30, 1999, compared with $58 million as of
  December 31, 1998. These amounts are net of cumulative write-downs of $5 million
  as of both dates.
  
  CIGNA considers bonds that are delinquent or restructured as to terms, typically
  interest rate and in certain cases maturity date,  problem bonds. As of June 30,
  1999  and  December  31,  1998,  CIGNA  had  problem  bonds,  including  amounts
  attributable to policyholder contracts, of $165 million and $108 million, net of
  related  cumulative  write-downs  of $27 million and $19 million,  respectively.
  Problem  bonds  included  $14 million and $3 million,  respectively,  related to
  emerging  market  investments  as of June 30, 1999 and December 31, 1998.  CIGNA
  recognizes interest income on problem bonds only when payment is received.
  
  
  Mortgage Loans
  
  --------------------------------------------------------------
                                      June 30,    December 31,
                                         1999            1998
  --------------------------------------------------------------
  Mortgage loans (in millions)        $10,115         $ 9,599
  Property type:
   Office buildings                        39%             37%
   Retail facilities                       33              34
   Apartment buildings                     14              15
   Industrial                               6               7
   Hotels                                   6               5
   Other                                    2               2
  Total                                   100%            100%
  --------------------------------------------------------------
  
  CIGNA's  investment  strategy  requires  diversification  of the  mortgage  loan
  portfolio. This strategy includes guidelines relative to property type, location
  and borrower to reduce its exposure to potential losses.
  
       Potential Problem and Problem Mortgage Loans
  
  Potential problem mortgage loans include:
  o    fully  current  loans  that  are  judged  by  management  to  have  certain
       characteristics that increase the likelihood of problem classification;
  o    fully current loans for which the borrower has requested restructuring; and
  o    loans  that  are 30 to 59 days  delinquent  with  respect  to  interest  or
       principal payments.
  
  CIGNA had potential problem mortgage loans,  including  amounts  attributable to
  policyholder  contracts,  of $54 million as of June 30, 1999, and $55 million as
  of December 31, 1998. There were no valuation  reserves related to these amounts
  in either period.
  
  CIGNA's  problem  mortgage loans include  delinquent and  restructured  mortgage
  loans. Delinquent mortgage loans include those on which payment is overdue by 60
  days or more.  Restructured mortgage loans are those whose basic financial terms
  have been modified, typically to reduce the interest rate or extend the maturity
  date.
  
                                         19
  <PAGE>
  
  
  CIGNA had problem mortgage loans, including amounts attributable to policyholder
  contracts,  of $96 million and $98 million, as of June 30, 1999 and December 31,
  1998, net of valuation reserves of $6 million as of both dates. CIGNA recognizes
  interest income on problem mortgage loans only when payment is received.
  
  Real Estate
  
  As of June 30, 1999 and  December  31,  1998,  investment  real  estate,  net of
  reserves  and  write-downs,   included:   1)  $449  million  and  $390  million,
  respectively,  of real estate  held for the  production  of income,  and 2) $349
  million and $343 million,  respectively, of real estate held for sale, primarily
  properties acquired as a result of foreclosure of mortgage loans.
  
  Summary
  
  The effects of  write-downs,  changes in  valuation  reserves  and  non-accruals
  related to  investment  assets for the second  quarter and six months ended June
  30, 1999 and 1998 were not material to CIGNA's policyholder  contracts,  results
  of operations, liquidity or financial position.
  
  Additional  losses from problem  investments  are expected to occur for specific
  investments   in  the  normal  course  of  business.   Assuming  no  significant
  deterioration   in   economic   conditions,    including   further   significant
  deterioration  in Latin  American  and Asian  economies,  CIGNA  does not expect
  additional  non-accruals,  write-downs and reserves to materially  affect future
  results of  operations,  liquidity  or  financial  condition,  or to result in a
  significant decline in the aggregate carrying value of its assets.
  
  YEAR 2000
  
  CIGNA is highly  dependent  on  automated  systems and systems  applications  in
  conducting its  operations.  These systems include  information  technology (IT)
  systems  that are used for,  among other  things,  processing  claims,  billing,
  collecting  premiums  from  customers,   managing   investment   activities  and
  maintaining  management  information  systems.  If these  systems were unable to
  function because of failing to be Year 2000 ready,  CIGNA's business  operations
  would be  interrupted,  which  could have a material  adverse  effect on CIGNA's
  results of operations.
  
  CIGNA's Year 2000 efforts include: 1) identifying systems requiring remediation;
  2) assessing what is required to remediate those systems; 3) remediating systems
  to be ready for the Year 2000 (by either  modifying or replacing  them);  and 4)
  testing systems for Year 2000 readiness,  including that they properly interface
  with  systems  of  external   parties,   such  as  customers   and   third-party
  administrators.  CIGNA has completed the  identification  and assessment  phases
  with respect to its IT systems that are critical to  maintaining  operations  or
  where  the  failure  of those  systems  would  result  in  significant  costs or
  disruption  of operations  ("mission  critical  systems").  As of June 30, 1999,
  CIGNA has  substantially  completed the  remediation  and testing of its mission
  critical systems.
  
  CIGNA's  systems  also  include  non-IT  systems,  such as  telephone,  facility
  management  and other systems using  embedded  chips.  These non-IT systems were
  substantially Year 2000 ready as of June 30, 1999.
  
  CIGNA is using  both  internal  and  external  resources  to meet the  timetable
  established for completion of its Year 2000 efforts. The after-tax costs of Year
  2000  efforts  (including  amounts  related  to  discontinued  operations)  were
  approximately  $100  million in 1998 and are  expected to be  approximately  $45
  million in 1999. Year 2000 after-tax costs for the second quarter and six months
  of  1999  were   approximately  $10  million  and  $20  million,   respectively.
  Approximately  60% of total Year 2000 costs are attributable to existing systems
  resources  which have been  redirected to the Year 2000  efforts.  The remaining
  amounts  represent  incremental  costs for Year 2000 efforts.  Although  certain
  systems  development  efforts  have been  deferred in order to address Year 2000
  issues, CIGNA does not expect that this deferral will have a significant adverse
  effect on its results of operations or financial condition.
  
  CIGNA has relationships with various third-party entities in the ordinary course
  of business. For example,  CIGNA receives data from clients;  depends on others,
  such as third-party  administrators  and banks,  for services;  and bears credit
  risk on others,  such as  entities  in which it
  
                                         20
  
  <PAGE>
  
  invests.  CIGNA has identified  third-party entities critical to its operations,
  and it is  assessing  and  attempting  to mitigate its risks with respect to the
  potential  failure  of these  entities  to be Year 2000  ready by,  among  other
  things,  reviewing,  where possible,  their formal Year 2000 plans and obtaining
  Year 2000 readiness  affirmations from certain third-party entities. The effect,
  if any, on CIGNA's  results of  operations  from the  failure of these  entities
  (including  entities on which CIGNA bears  credit risk) to be Year 2000 ready is
  not reasonably estimable.
  
  While  CIGNA  expects  that its Year 2000  efforts  will be  successful,  it has
  completed a  comprehensive  analysis of the  operational  problems that would be
  reasonably  likely to result from the failure by CIGNA and certain third parties
  to complete efforts necessary to achieve Year 2000 compliance on a timely basis.
  CIGNA has  historically  had security and backup  policies  and  procedures  for
  safeguarding  critical  corporate  data. It is  supplementing  these policies by
  developing  Year  2000  contingency  plans  to  provide  for the  continuity  of
  operations  in the  event  of Year  2000  systems  failures  or the  failure  of
  third-party  entities  to be Year 2000  ready.  These  plans are  expected to be
  completed and tested prior to the end of 1999.
  
  The costs of CIGNA's Year 2000 efforts and the dates on which CIGNA  believes it
  will complete such efforts are based on management's best estimates,  which were
  derived  using  numerous  assumptions  regarding  future  events,  including the
  continued availability of certain resources,  third-party remediation plans, and
  other factors.  There can be no assurance that these  estimates will prove to be
  accurate,  and actual  results  could  differ  materially  from those  currently
  anticipated.  Specific  factors  that  could  cause  such  material  differences
  include, but are not limited to, the availability and costs of personnel trained
  in Year 2000 issues,  the ability to identify,  assess,  remediate  and test all
  relevant  computer  codes and  embedded  technology,  the risk  that  reasonable
  testing will not uncover all Year 2000 problems, and similar uncertainties.
  
  
                                         21
  <PAGE>
  
  
  CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF THE "SAFE  HARBOR"  PROVISIONS  OF THE
  PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  
  Except for historical  information provided in this Management's  Discussion and
  Analysis of  Financial  Condition  and Results of  Operations,  statements  made
  throughout  this  document are  forward-looking  and contain  information  about
  financial results,  economic conditions,  trends and known uncertainties.  CIGNA
  cautions  the reader that actual  results  could  differ  materially  from those
  expected by CIGNA,  depending on the outcome of certain  factors  (some of which
  are described with the forward-looking  statements) including: 1) an increase in
  medical  costs  in  CIGNA's  health  care  operations,  including  increases  in
  utilization  and  costs  of  medical   services;   2)  heightened   competition,
  particularly price competition, reducing product margins and constraining growth
  in CIGNA's businesses;  3) significant changes in interest rates; 4) significant
  stock market  declines  resulting  in payments  contingent  on certain  variable
  annuity account values;  5) the effect on CIGNA's  international  operations and
  investments from further  significant  deterioration in Latin American and Asian
  economies; 6) the results of the evaluation described on page 16 of alternatives
  related to an investment in Brazilian health care  operations;  and 7) proposals
  to change federal corporate income taxes.
  
  
                                         22
  <PAGE>
  
  Part II. OTHER INFORMATION
  
  Item 4.   Submission of Matters to a Vote of Security Holders.
  
            The Annual Meeting of  Shareholders  of CIGNA  Corporation was held on
            April 28,  1999.  At the meeting,  174,379,373  shares of Common Stock
            were  represented and entitled to vote as of March 1, 1999, the record
            date; 204,865,115 shares of Common Stock were outstanding and entitled
            to vote as of March 1,  1999,  the  record  date.  CIGNA  shareholders
            elected   nominees  to  the  Board  of  Directors   and  ratified  the
            appointment of  PricewaterhouseCoopers  LLP as independent accountants
            for 1999.
  
  <TABLE>
  <CAPTION>
                                                                       Votes
                                                    Votes For          Withheld
                                                    ---------          --------
  <S>                                              <C>                 <C>           <C>
  
            Election of nominee to
            Board of Directors for
            term expiring in April, 2000
  
                   H. Edward Hanway                173,585,696         793,677
  
            Election of nominees to
            Board of Directors for
            terms expiring in April, 2002
  
                   Peter N. Larson                 173,617,899         761,474
                   Joseph Neubauer                 173,517,736         861,637
                   Carol Cox Wait                  173,578,954         800,419
                   Marilyn Ware                    173,602,102         777,271
  
            -----------------------------
  
                                                    Votes For      Votes Against      Abstentions
                                                    ---------      -------------      -----------
  
            Ratification of Pricewaterhouse-
            Coopers as Independent Accountants     173,908,589        94,963            375,821
  </TABLE>
  
  
                                         23
  <PAGE>
  
  
  
  Item  6.  Exhibits and Reports on Form 8-K.
  
  
            (a)  See Exhibit Index.
  
            (b)  During the  quarterly  period ended June 30, 1999,  and as of the
                 filing date, CIGNA filed the following Reports on Form 8-K:
  
                 o    dated  August 2, 1999,  Item 5 -  containing  a news release
                      regarding its second quarter 1999 results.
  
                 o    dated  July 2,  1999,  Item 2 -  containing  a news  release
                      regarding the sale of its P&C businesses to ACE.
  
                 o    dated  May 3,  1999,  Item  5 -  containing  a news  release
                      regarding its first quarter 1999 results.
  
  
                                         24
  
  <PAGE>
  
                                      SIGNATURE
  
  
           Pursuant to the requirements of the Securities Exchange Act of 1934,
  the registrant has duly caused this report to be signed by the undersigned duly
  authorized officer, on its behalf and in the capacity indicated.
  
  
                                                     CIGNA CORPORATION
  
  
  
                                                     By: /s/ James A. Sears
                                                         -------------------------
                                                         James A. Sears
                                                         Vice President and
                                                         Chief Accounting Officer
  
  
  Date: August 6, 1999
  
  
  
  
  
  
  
  
                                         25
  
  <PAGE>
  
                                    Exhibit Index
                                    -------------
  
  
                                                                 Method of
  Number         Description                                      Filing
  ------         -----------                                      ------
  
  
  10             Description of Stock Compensation           Filed herewith
                 Plan for Non-Employee Directors
                 of CIGNA Corporation (as amended
                 and restated, effective July 1, 1999)
  
  12             Computation of Ratio of                     Filed herewith
                 Earnings to Fixed Charges
  
  27.1           Financial Data Schedule                     Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.2           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.3           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.4           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  
                                         26
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 118204}]
metadata_filer: {"company-data": {"conformed-name": "CIGNA CORP", "cik": "0000701221", "assigned-sic": "6321", "irs-number": "061059331", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-08323", "film-number": "99679715"}, "business-address": {"street1": "ONE LIBERTY PLACE 48TH FLOOR", "street2": "1601 CHESTNUT STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19192-1550", "phone": "2157616211"}, "mail-address": {"street1": "TWO LIBERTY PLACE 48TH FLOOR", "street2": "1601 CHESTNUT STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19192"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  
                [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    For the quarterly period ended June 30, 1999
                                                   -------------
  
                                         OR
  
                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    for the transition period from _____ to _____
  
                            Commission file number 1-8323
                                                   ------
  
                                  CIGNA Corporation
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
                           Delaware                     06-1059331
               -------------------------------      -----------------
                (State or other jurisdiction         (I.R.S. Employer
             of incorporation or organization)      Identification No.)
  
                        One Liberty Place, 1650 Market Street
                          Philadelphia, Pennsylvania 19192
               ------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
          Registrant's telephone number, including area code (215) 761-1000
                                                             --------------
  
                                   Not Applicable
               ------------------------------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  
       Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  registrant was required to file such reports), and (2) has been subject to such
  filing requirements for the past 90 days.
  
                                                             Yes  _x_     No ___
  
  As of June 30, 1999, 199,121,311 shares of the issuer's Common Stock were
  outstanding.
  CIGNA CORPORATION
  
                                        INDEX
  
                                                                          Page No.
                                                                          --------
  
  PART I.  FINANCIAL INFORMATION
  
           Item 1.  Financial Statements
  
                    Consolidated Income Statements                           1
                    Consolidated Balance Sheets                              2
                    Consolidated Statements of Comprehensive
                       Income and Changes in Shareholders' Equity            3
                    Consolidated Statements of Cash  Flows                   4
                    Notes to Financial Statements                            5
  
           Item 2.  Management's Discussion and Analysis
                    of Financial Condition and Results of Operations         11
  
  PART II. OTHER INFORMATION
  
           Item 4. Submission of Matters to a Vote of Security Holders       23
           Item 6. Exhibits and Reports on Form 8-K                          24
  
  SIGNATURE                                                                  25
  
  EXHIBIT INDEX                                                              26
  
  As used herein, "CIGNA" refers to one or more of CIGNA Corporation and its
  consolidated subsidiaries.
  Part I.  FINANCIAL  INFORMATION
  Item 1.  Financial Statements
  -----------------------------
  
  CIGNA  CORPORATION
  CONSOLIDATED INCOME STATEMENTS
  (In millions, except per share amounts)
  Three Months Ended             Six Months Ended
                                                                          June 30,                       June 30,
                                                                    1999            1998           1999            1998
  ----------------------------------------------------------------------------------------------------------------------
  REVENUES
  Premiums and fees                                               $ 3,724         $ 3,354        $ 7,311         $ 6,570
  Net investment income                                               734             789          1,455           1,578
  Other revenues                                                      226             168            404             635
  Realized investment gains                                            13              39             24              79
                                                                  -------         -------        -------         -------
      Total revenues                                                4,697           4,350          9,194           8,862
                                                                  -------         -------        -------         -------
  
  BENEFITS, LOSSES AND EXPENSES
  Benefits, losses and settlement expenses                          3,119           2,930          6,138           5,776
  Policy acquisition expenses                                          58              43            125              90
  Other operating expenses                                          1,051             992          2,094           1,928
                                                                  -------         -------        -------         -------
      Total benefits, losses and expenses                           4,228           3,965          8,357           7,794
                                                                  -------         -------        -------         -------
  
  INCOME FROM CONTINUING OPERATIONS BEFORE
      INCOME TAXES                                                    469             385            837           1,068
                                                                  -------         -------        -------         -------
  
  Income taxes (benefits):
      Current                                                         213             121            326             534
      Deferred                                                        (47)             15            (28)           (154)
                                                                  -------         -------        -------         -------
          Total taxes                                                 166             136            298             380
                                                                  -------         -------        -------         -------
  
  INCOME FROM CONTINUING OPERATIONS                                   303             249            539             688
  
  Income (loss) from discontinued operations, net of taxes            (71)             59            (28)            115
                                                                  -------         -------        -------         -------
  
  INCOME BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                                    232             308            511             803
  
  Cumulative effect of accounting change, net of taxes                 --              --            (91)             --
                                                                  -------         -------        -------         -------
  
  NET INCOME                                                      $   232         $   308        $   420         $   803
  ----------------------------------------------------------------======================================================
  
  BASIC EARNINGS PER SHARE
  Income from continuing operations                               $  1.50         $  1.16        $  2.65         $  3.20
  Income (loss) from discontinued operations, net of taxes          (0.35)           0.28          (0.14)           0.54
  ----------------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change               1.15            1.44           2.51            3.74
  Cumulative effect of accounting change, net of taxes                 --              --          (0.44)             --
  ----------------------------------------------------------------------------------------------------------------------
  Net income                                                      $  1.15         $  1.44        $  2.07         $  3.74
  ----------------------------------------------------------------======================================================
  
  DILUTED EARNINGS PER SHARE
  Income from continuing operations                               $  1.48         $  1.15        $  2.61         $  3.17
  Income (loss) from discontinued operations, net of taxes          (0.35)           0.27          (0.13)           0.53
  ----------------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change               1.13            1.42           2.48            3.70
  Cumulative effect of accounting change, net of taxes                 --              --          (0.44)             --
  ----------------------------------------------------------------------------------------------------------------------
  Net income                                                      $  1.13         $  1.42        $  2.04         $  3.70
  ----------------------------------------------------------------======================================================
  
  DIVIDENDS DECLARED PER SHARE                                    $  0.30         $  0.29        $  0.60         $  0.57
  ----------------------------------------------------------------======================================================
  The Notes to Financial Statements are an integral part of these statements.
  
                                                             1
  CIGNA  CORPORATION
  CONSOLIDATED  BALANCE  SHEETS
  (In millions, except per share amounts)
  As of                  As of
                                                                                  June 30,            December 31,
                                                                                    1999                  1998
  --------------------------------------------------------------------------------------------------------------
  ASSETS
  Investments:
     Fixed maturities, at fair value (amortized cost, $22,625; $22,663)            $ 23,121             $ 24,270
     Equity securities, at fair value (cost, $263; $249)                                541                  477
     Mortgage loans                                                                  10,115                9,599
     Policy loans                                                                     3,674                6,185
     Real estate                                                                        798                  733
     Other long-term investments                                                        146                  170
     Short-term investments                                                             243                  242
                                                                                   --------             --------
         Total investments                                                           38,638               41,676
  Cash and cash equivalents                                                           1,262                1,986
  Accrued investment income                                                             556                  617
  Premiums, accounts and notes receivable                                             2,589                2,481
  Reinsurance recoverables                                                            6,737                6,666
  Deferred policy acquisition costs                                                     767                  730
  Property and equipment                                                                700                  701
  Deferred income taxes                                                               1,269                1,034
  Other assets                                                                          699                  750
  Goodwill and other intangibles                                                      2,050                2,090
  Separate account assets                                                            36,179               34,808
  Net assets of discontinued operations                                               2,000                2,351
  --------------------------------------------------------------------------------------------------------------
  
          Total assets                                                             $ 93,446             $ 95,890
  ---------------------------------------------------------------------------------=============================
  
  LIABILITIES
  Contractholder deposit funds                                                     $ 27,779             $ 30,607
  Unpaid claims and claim expenses                                                    3,639                3,392
  Future policy benefits                                                             12,141               12,510
  Unearned premiums                                                                     496                  589
                                                                                   --------             --------
           Total insurance and contractholder liabilities                            44,055               47,098
  Accounts payable, accrued expenses and other liabilities                            4,631                4,358
  Current income taxes                                                                   --                   27
  Short-term debt                                                                       307                  272
  Long-term debt                                                                      1,361                1,428
  Separate account liabilities                                                       35,751               34,430
  --------------------------------------------------------------------------------------------------------------
           Total liabilities                                                         86,105               87,613
  --------------------------------------------------------------------------------------------------------------
  
  CONTINGENCIES - NOTE 9
  
  SHAREHOLDERS' EQUITY
  Common stock (par value, $0.25; shares issued, 267; 265)                               67                   66
  Additional paid-in capital                                                          2,814                2,719
  Net unrealized appreciation, fixed maturities                         $    160             $    750
  Net unrealized appreciation, equity securities                             278                  206
  Net translation of foreign currencies                                     (223)                (114)
                                                                        --------             --------
     Accumulated other comprehensive income                                             215                  842
  Retained earnings                                                                   7,045                6,746
  Less treasury stock, at cost                                                       (2,800)              (2,096)
  --------------------------------------------------------------------------------------------------------------
           Total shareholders' equity                                                 7,341                8,277
  --------------------------------------------------------------------------------------------------------------
  
           Total liabilities and shareholders' equity                              $ 93,446             $ 95,890
  ---------------------------------------------------------------------------------=============================
  
  SHAREHOLDERS' EQUITY PER SHARE                                                   $  36.87             $  40.25
  ---------------------------------------------------------------------------------=============================
  The Notes to Financial Statements are an integral part of these statements.
  
                                                         2
  CIGNA  CORPORATION
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN
      SHAREHOLDERS' EQUITY
  (In millions)
  Three Months Ended June 30,                                                 1999                      1998
  -------------------------------------------------------------------------------------------------------------------
                                                                       Compre-      Share-       Compre-      Share-
                                                                       hensive     holders'      hensive     holders'
                                                                       Income      Equity        Income      Equity
  -------------------------------------------------------------------------------------------------------------------
  Common stock                                                                      $    67                   $    66
                                                                                    -------                   -------
  
  Additional paid-in capital, April 1                                                 2,788                     2,695
    Issuance of common stock for employee benefits plans                                 26                         9
                                                                                    -------                   -------
  Additional paid-in capital, June 30                                                 2,814                     2,704
                                                                                    -------                   -------
  
  Accumulated other comprehensive income, April 1                                       503                       812
    Net unrealized appreciation (depreciation) - fixed maturities      $  (335)        (335)     $    22           22
    Net unrealized appreciation (depreciation) - equity securities          49           49           (2)          (2)
                                                                       -------                   -------
        Net unrealized appreciation (depreciation) on securities          (286)                       20
    Net translation of foreign currencies                                   (2)          (2)           3            3
                                                                       -------                   -------
            Other comprehensive income (loss)                             (288)                       23
                                                                                    -------                   -------
  Accumulated other comprehensive income, June 30                                       215                       835
                                                                                    -------                   -------
  
  Retained earnings, April 1                                                          6,873                     6,129
    Net income                                                             232          232          308          308
    Common dividends declared                                                           (60)                      (61)
                                                                                    -------                   -------
  Retained earnings, June 30                                                          7,045                     6,376
                                                                                    -------                   -------
  
  Treasury stock, April 1                                                            (2,362)                   (1,377)
    Repurchase of common stock                                                         (429)                     (260)
    Other treasury stock transactions, net                                               (9)                       (4)
                                                                                    -------                   -------
  Treasury stock, June 30                                                            (2,800)                   (1,641)
  -------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME (LOSS) AND SHAREHOLDERS' EQUITY           $   (56)     $ 7,341      $   331      $ 8,340
  ---------------------------------------------------------------------==============================================
  
  Six Months Ended June 30,
  -------------------------------------------------------------------------------------------------------------------
  Common stock, January 1                                                           $    66                   $    66
    Issuance of common stock for employee benefits plans                                  1                        --
                                                                                    -------                   -------
  Common stock, June 30                                                                  67                        66
                                                                                    -------                   -------
  
  Additional paid-in capital, January 1                                               2,719                     2,655
    Issuance of common stock for employee benefits plans                                 95                        49
                                                                                    -------                   -------
  Additional paid-in capital, June 30                                                 2,814                     2,704
                                                                                    -------                   -------
  
  Accumulated other comprehensive income, January 1                                     842                       758
    Net unrealized depreciation, fixed maturities                      $  (590)        (590)     $    (7)          (7)
    Net unrealized appreciation, equity securities                          72           72           80           80
                                                                       -------                   -------
        Net unrealized appreciation (depreciation) on securities          (518)                       73
    Net translation of foreign currencies                                 (109)        (109)           4            4
                                                                       -------                   -------
            Other comprehensive income (loss)                             (627)                       77
                                                                                    -------                   -------
  Accumulated other comprehensive income, June 30                                       215                       835
                                                                                    -------                   -------
  
  Retained earnings, January 1                                                        6,746                     5,696
    Net income                                                             420          420          803          803
    Common dividends declared                                                          (121)                     (123)
                                                                                    -------                   -------
  Retained earnings, June 30                                                          7,045                     6,376
                                                                                    -------                   -------
  
  Treasury stock, January 1                                                          (2,096)                   (1,243)
    Repurchase of common stock                                                         (658)                     (371)
    Other treasury stock transactions, net                                              (46)                      (27)
                                                                                    -------                   -------
  Treasury stock, June 30                                                            (2,800)                   (1,641)
  -------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME (LOSS) AND SHAREHOLDERS' EQUITY           $  (207)     $ 7,341      $   880      $ 8,340
  ---------------------------------------------------------------------==============================================
  The Notes to Financial Statements are an integral part of these statements.
  
                                                           3
  CIGNA  CORPORATION
  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
  (In millions)
  Six Months Ended June 30,
                                                                                                    1999         1998
  ----------------------------------------------------------------------------------------------------------------------
  CASH FLOWS FROM OPERATING ACTIVITIES
      Income from continuing operations                                                            $   539      $   688
      Adjustments to reconcile income from continuing operations
          to net cash provided by (used in) operating activities:
              Insurance liabilities                                                                    324          452
              Reinsurance recoverables                                                                 (72)         (64)
              Deferred policy acquisition costs                                                        (73)         (60)
              Premiums, accounts and notes receivable                                                 (149)        (197)
              Accounts payable, accrued expenses, other liabilities and
                  current income taxes                                                                 235           18
              Deferred income taxes                                                                    (28)        (154)
              Realized investment gains                                                                (24)         (79)
              Depreciation and goodwill amortization                                                    98          108
              Gain on sale of businesses                                                              (116)        (367)
              Other, net                                                                               (24)        (192)
                                                                                                   -------      -------
                  Net cash provided by operating activities of continuing operations                   710          153
                                                                                                   -------      -------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from investments sold:
          Fixed maturities                                                                           1,303        1,948
          Equity securities                                                                             57           89
          Mortgage loans                                                                               135          556
          Other                                                                                        779          853
      Investment maturities and repayments:
          Fixed maturities                                                                           1,423        1,540
          Mortgage loans                                                                               179          348
      Investments purchased:
          Fixed maturities                                                                          (2,800)      (3,138)
          Equity securities                                                                            (61)        (193)
          Mortgage loans                                                                              (924)        (920)
          Other                                                                                       (504)      (1,485)
      Proceeds on sale of businesses                                                                   107        1,296
      Other, net                                                                                      (146)        (152)
                                                                                                   -------      -------
                  Net cash provided by (used in) investing activities of continuing operations        (452)         742
                                                                                                   -------      -------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
      Deposits and interest credited to contractholder deposit funds                                 3,608        4,419
      Withdrawals and benefit payments from contractholder deposit funds                            (3,863)      (4,805)
      Net change in short-term debt                                                                    (32)        (362)
      Repayment of long-term debt                                                                       --          (99)
      Repurchase of common stock                                                                      (633)        (366)
      Issuance of common stock                                                                          35           17
      Common dividends paid                                                                           (120)        (122)
                                                                                                   -------      -------
                  Net cash used in financing activities of continuing operations                    (1,005)      (1,318)
                                                                                                   -------      -------
  Effect of foreign currency rate changes on cash and cash equivalents                                 (13)          (2)
  Net cash (to) from discontinued operations                                                            36         (178)
  ---------------------------------------------------------------------------------------------------------------------
  Net decrease in cash and cash equivalents                                                           (724)        (603)
  Cash and cash equivalents, beginning of period                                                     1,986        1,832
  ---------------------------------------------------------------------------------------------------------------------
  
  Cash and cash equivalents, end of period                                                         $ 1,262      $ 1,229
  -------------------------------------------------------------------------------------------------====================
  
  Supplemental Disclosure of Cash Information:
      Income taxes paid, net of refunds                                                            $   281      $   478
      Interest paid                                                                                $    61      $    66
  ---------------------------------------------------------------------------------------------------------------------
  The Notes to Financial Statements are an integral part of these statements.
  
                                                            4
  CIGNA CORPORATION
  NOTES TO FINANCIAL STATEMENTS
  
  NOTE 1 - BASIS OF PRESENTATION
  
  The consolidated  financial statements include the accounts of CIGNA Corporation
  and  all  significant   subsidiaries  (CIGNA).   These  consolidated   financial
  statements have been prepared in conformity with generally  accepted  accounting
  principles.  Certain  reclassifications  have been made to conform with the 1999
  presentation.
  
  The interim  financial  statements  are  unaudited  but include all  adjustments
  (consisting  of normal  recurring  adjustments)  necessary,  in the  opinion  of
  management, for a fair statement of financial position and results of operations
  for the period reported.
  
  The preparation of interim financial  statements  necessarily  relies heavily on
  estimates.  This and  certain  other  factors,  such as the  seasonal  nature of
  portions of the  insurance  business  as well as  competitive  and other  market
  conditions,  call for caution in  estimating  results for the full year based on
  interim results of operations.
  
  NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily related to the property and casualty business, which has been sold and
  which is reported as discontinued operations, as discussed below.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting  Standards  Board (FASB) issued  Statement of
  Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
  Instruments and Hedging  Activities."  SFAS No. 133 requires that derivatives be
  reported  on the balance  sheet at fair  value.  Changes in fair value are to be
  recognized  in net income or,  for  derivatives  that are  hedging  market  risk
  related to future cash flows,  in the  accumulated  other  comprehensive  income
  section of shareholders' equity. Implementation is required by the first quarter
  of 2001,  with the  cumulative  effect of adoption  reflected  in net income and
  accumulated other comprehensive income, as appropriate. CIGNA has not determined
  the effect or timing of implementation of this pronouncement.
  
  NOTE 3 - ACQUISITIONS AND DISPOSITIONS
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  The after-tax gain
  on sale,  which  will be  recognized  in  discontinued  operations  in the third
  quarter,  was approximately  $1.2 billion.  In the second quarter of 1999, CIGNA
  began  reporting  the  sold  property  and  casualty  business  as  discontinued
  operations and reclassified prior period financial information accordingly.
  
                                         5
  Summarized financial data for the discontinued operations are outlined below:
  ------------------------------------------------------------------------------------------
                                            Three Months                   Six Months
                                               Ended                         Ended
                                              June 30,                      June 30,
  (In millions)                         1999            1998           1999            1998
  ------------------------------------------------------------------------------------------
  Income Statement Data
  
  Revenues                              $944            $987         $1,863          $1,904
                                     ======================================================
  Income (loss) before income
       taxes                           $(110)            $86           $(48)           $171
  Income taxes (benefits)                (39)             27            (20)             56
                                     ------------------------------------------------------
  Income (loss) before
       cumulative effect of
       accounting change                $(71)            $59           $(28)           $115
  -----------------------------------======================================================
  -------------------------------------------------------
                                 June 30,    December 31,
  (In millions)                     1999             1998
  -------------------------------------------------------
  Balance Sheet Data
  
  Invested assets                  $7,260         $9,031
  Reinsurance recoverables          6,045          6,470
  Other assets                      7,082          6,240
                                ------------------------
  Total assets                     20,387         21,741
                                ========================
  
  Insurance liabilities            15,990         16,494
  Other liabilities                 2,397          2,896
                                ------------------------
  Total liabilities                18,387         19,390
                                ========================
  Net assets                       $2,000         $2,351
  ------------------------------========================
  
  Accumulated  other   comprehensive   income  associated  with  the  discontinued
  operations  was $24 million as of June 30, 1999 and $222  million as of December
  31, 1998.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain,  which  CIGNA  recognized  in the second  quarter,  was $43 million and is
  reported in the International Life, Health and Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining basis. CIGNA recognized $16 million of the deferred gain in the second
  quarters  of 1999 and 1998,  and $31  million and $33 million for the six months
  ended June 30, 1999 and 1998, respectively.
  
  CIGNA had other acquisitions and dispositions  during the six months of 1999 and
  1998, the effects of which were not material to the financial statements.
  
  NOTE 4 - INVESTMENTS
  
  Realized Investment Gains and Losses
  
  Realized  gains and losses on investments  of continuing  operations,  excluding
  policyholder share, were as follows:
  
  ------------------------------------------------------------------------
                                   Three Months            Six Months
                                      Ended                    Ended
                                     June 30,                 June 30,
  (In millions)                  1999        1998         1999        1998
  ------------------------------------------------------------------------
  
  Fixed maturities                 $5         $--          $10         $20
  Equity securities                 6          23           13          25
  Mortgage loans                   --          (7)          --           5
  Real Estate                       2           6            1           7
  Other                            --          17           --          22
                                ------------------------------------------
                                   13          39           24          79
  Less income taxes                 4          13            8          27
  ------------------------------------------------------------------------
  Net realized investment gains    $9         $26          $16         $52
  ------------------------------==========================================
  
  Fixed Maturities and Equity Securities
  
  Sales of available-for-sale fixed maturities and equity securities, including
  policyholder share, for continuing operations were as follows:
  -------------------------------------------------------------------------------------
                                      Three Months                    Six Months
                                         Ended                           Ended
                                        June 30,                        June 30,
  (In millions)                   1999            1998            1999            1998
  -------------------------------------------------------------------------------------
  Proceeds from sales             $979          $1,162          $1,360          $2,037
  Gross gains on sales              29              70              43              97
  Gross losses on sales             (7)            (28)             (8)            (41)
  -------------------------------------------------------------------------------------
  6
  The components of net unrealized appreciation (depreciation) on securities
  (including securities of discontinued operations and excluding policyholder
  share) for the three and six months ended June 30 were as follows:
  
  -------------------------------------------------------------------------------
  (In millions)                                              1999          1998
  -------------------------------------------------------------------------------
  Three months ended June 30,
  
  Unrealized appreciation (depreciation) on
  securities held, net of taxes (benefits) of $(133)
  and $16, respectively.                                    $(249)        $  40
  
  Less gains realized in net income, net of taxes
  of $20 and $10, respectively.                                37            20
                                                            -------------------
  Net unrealized appreciation (depreciation)                $(286)        $  20
  ----------------------------------------------------------===================
  
  Six months ended June 30,
  
  Unrealized appreciation (depreciation) on
  securities held, net of taxes (benefits) of $(244)
  and $109, respectively.                                   $(454)        $ 219
  
  Less gains realized in net income, net of taxes
  of $34 and $78, respectively.                                64           146
                                                            -------------------
  Net unrealized appreciation (depreciation)                $(518)        $  73
  ----------------------------------------------------------===================
  
  NOTE 5 - EARNINGS PER SHARE
  -------------------------------------------------------------------
  (Dollars in millions,                         Effect of
  except per share amounts)         Basic       Dilution     Diluted
  -------------------------------------------------------------------
  Three Months Ended June 30,
  -------------------------------------------------------------------
  1999
  -------------------------------------------------------------------
  Net income                      $    232           --      $    232
  --------------------------------===================================
  
  Shares (in thousands):
  
  Weighted average                 201,729           --       201,729
  
  Options and restricted
  stock grants                                    3,354         3,354
  -------------------------------------------------------------------
  
  Total shares                     201,729        3,354       205,083
  --------------------------------===================================
  Earnings per share              $   1.15     $  (0.02)     $   1.13
  --------------------------------===================================
  1998
  -------------------------------------------------------------------
  Net income                      $    308           --      $    308
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 213,831           --       213,831
  
  Options and restricted
  stock grants                                    2,715         2,715
  -------------------------------------------------------------------
  
  Total shares                     213,831        2,715       216,546
  --------------------------------===================================
  Earnings per share              $   1.44     $  (0.02)     $   1.42
  --------------------------------===================================
  
  Six Months Ended June 30,
  -------------------------------------------------------------------
  1999
  -------------------------------------------------------------------
  Net income                      $    420           --      $    420
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 203,294           --       203,294
  
  Options and restricted
  stock grants                                    3,091         3,091
  -------------------------------------------------------------------
  
  Total shares                     203,294        3,091       206,385
  --------------------------------===================================
  Earnings per share              $   2.07     $  (0.03)     $   2.04
  --------------------------------===================================
  1998
  -------------------------------------------------------------------
  Net income                      $    803           --      $    803
  --------------------------------===================================
  Shares (in thousands):
  
  Weighted average                 214,730           --       214,730
  
  Options and restricted
  stock grants                                    2,415         2,415
  -------------------------------------------------------------------
  
  Total shares                     214,730        2,415       217,145
  --------------------------------===================================
  Earnings per share              $   3.74     $  (0.04)     $   3.70
  --------------------------------===================================
  Common shares held as Treasury shares were 67,503,466 and 52,561,178 as of June
  30, 1999 and 1998, respectively.
  
                                         7
  NOTE 6 - REINSURANCE RECOVERABLES
  
  In the normal  course of business,  CIGNA's  insurance  subsidiaries  enter into
  agreements  to assume  and cede  reinsurance  with  other  insurance  companies.
  Reinsurance  is ceded  primarily  to limit  losses from large  exposures  and to
  permit recovery of a portion of direct losses,  although ceded  reinsurance does
  not relieve the originating insurer of liability.
  
  In connection  with the sale of CIGNA's  individual  life  insurance and annuity
  business (as  discussed  in Note 3), the  reinsurance  recoverable  from Lincoln
  National Corporation at June 30, 1999 was $6.0 billion.
  
  Failure of reinsurers to indemnify CIGNA, as a result of reinsurer  insolvencies
  and disputes, could result in losses. However, CIGNA does not expect charges for
  unrecoverable   reinsurance  to  have  a  material  effect  on  its  results  of
  operations, liquidity or financial condition.
  
  In CIGNA's  consolidated income statements,  premiums and fees were net of ceded
  premiums and benefits,  losses and  settlement  expenses were net of reinsurance
  recoveries as follows:
  
  ------------------------------------------------------------------------
                                   Three Months            Six Months
                                      Ended                   Ended
                                     June 30,                June 30,
    (In millions)                1999        1998        1999        1998
  ------------------------------------------------------------------------
  
  Ceded premiums:
   Individual life
     insurance and
     annuity business sold       $101        $108        $164        $221
   Other                          122         105         229         214
                                 ----------------------------------------
  Total                          $223        $213        $393        $435
                                 ----------------------------------------
  Reinsurance recoveries:
   Individual life
     insurance and
     annuity business sold       $ 77        $ 62        $ 99        $118
  Other                            66         100         154         189
                                 ----------------------------------------
  Total                          $143        $162        $253        $307
  -------------------------------========================================
  
  NOTE 7 - SEGMENT INFORMATION
  
  Operating  segments  are  based on  CIGNA's  internal  reporting  structure  and
  generally reflect  differences in products;  the International  Life, Health and
  Employee  Benefits  segment is based on geography.  CIGNA uses operating  income
  (net  income  excluding  after-tax  realized  investment  results,   results  of
  discontinued  operations  and, in 1999,  the  cumulative  effect of adopting SOP
  97-3) to measure  the  financial  results of its  segments.  Summarized  segment
  financial information was as follows:
  -----------------------------------------------------------------------------------------
                                          Three Months                     Six Months
                                              Ended                           Ended
                                             June 30,                        June 30,
  (In millions)                        1999            1998            1999            1998
  -----------------------------------------------------------------------------------------
  Premiums and fees
    and other revenues:
  Employee Health Care,
    Life and Disability
    Benefits                        $ 3,219         $ 2,973         $ 6,355         $ 5,839
  Employee Retirement
    Benefits and Investment
    Services                             71              73             133             144
  International Life,
    Health and Employee
    Benefits                            482             309             865             587
  Other Operations                      222             189             441             684
  Corporate                             (44)            (22)            (79)            (49)
  -----------------------------------------------------------------------------------------
  Total                             $ 3,950         $ 3,522         $ 7,715         $ 7,205
  -----------------------------------------------------------------------------------------
  Income from continuing
    operations:
  Operating income (loss):
  Employee Health Care,
    Life and Disability
    Benefits                        $   173         $   143         $   330         $   274
  Employee Retirement
    Benefits and Investment
    Services                             67              60             130             121
  International Life,
    Health and Employee
    Benefits                             44               7              47              16
  Other Operations                       37              29              67             262
  Corporate                             (27)            (16)            (51)            (37)
                                   --------------------------------------------------------
  Total operating income                294             223             523             636
  Realized investment gains,
    net of taxes                          9              26              16              52
  -----------------------------------------------------------------------------------------
  Income from continuing
    operations                      $   303         $   249         $   539         $   688
  ---------------------------------========================================================
  8
  NOTE 8 - COST REDUCTION INITIATIVES
  
  In the  fourth  quarter  of  1997,  CIGNA  adopted  a  cost  reduction  plan  to
  restructure  its health care  operations,  which resulted in a pre-tax charge of
  $32 million  ($22 million  after-tax)  in the  Employee  Health  Care,  Life and
  Disability Benefits segment.  The charge consisted primarily of costs related to
  severance  and vacated  lease  space.  The cash  outlays  associated  with these
  initiatives  will continue through 1999 with most having occurred in 1998. As of
  June 30, 1999,  approximately $12 million of severance was paid to approximately
  1,400 employees.
  
  NOTE 9 - CONTINGENCIES AND OTHER MATTERS
  
  Financial Guarantees
  
  CIGNA,  through its subsidiaries,  is contingently  liable for various financial
  guarantees  provided in the  ordinary  course of business.  For  example,  CIGNA
  guarantees  the  repayment of  industrial  revenue  bonds and a minimum level of
  benefits for certain separate account contracts. In addition,  CIGNA has entered
  into specialty life reinsurance  contracts that guarantee payments for specified
  unfavorable  changes in variable  annuity  account  values  based on  underlying
  mutual fund  investments if account holders expire or elect to receive  periodic
  income payments.
  
  Although the  ultimate  outcome of any loss  contingencies  arising from CIGNA's
  financial  guarantees  may  adversely  affect  results of  operations  in future
  periods,  they are not  expected  to have a material  adverse  effect on CIGNA's
  liquidity or financial condition.
  
  Regulatory and Industry Developments
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative  and  regulatory  environment  that could affect  them.  Some of the
  changes include initiatives to:
  
  o    increase health care regulation;
  o    restrict  insurance pricing and the application of underwriting  standards;
       and
  o    revise federal tax laws.
  
  Some of the more significant issues are discussed below.
  
  Efforts at the federal and state level to increase regulation of the health care
  industry could have an adverse effect on CIGNA's health care  operations if they
  reduce  marketplace  competition and innovation,  result in increased medical or
  administrative costs or reduce product margins. Matters under consideration that
  could have an adverse effect include mandated benefits or services that increase
  costs  without  improving the quality of care,  loss of the Employee  Retirement
  Income Security Act of 1974 (ERISA) preemption of state law through  legislative
  actions and court decisions,  changes in the ERISA  regulations  governing claim
  appeal  procedures  imposing  increased  administrative  burdens  and  costs and
  restrictions on the use of prescription drug formularies. Due to the uncertainty
  associated with the timing and content of any proposals  ultimately adopted, the
  effect on CIGNA's results of operations, liquidity or financial condition cannot
  be reasonably estimated at this time.
  
  In early 1999, the Administration proposed a federal budget that would eliminate
  the  deferral  of  taxation  of  certain  statutory  income  of  life  insurance
  companies.  CIGNA has not provided for taxes on $450 million of such income.  If
  the proposal is enacted, CIGNA will record additional income tax expense of $158
  million for the  resulting  liability.  The proposed  federal  budget also would
  limit  the  deduction  of  interest  expense  on  the  general  indebtedness  of
  corporations owning non-leveraged corporate life insurance policies covering the
  lives of officers,  employees or directors who are not 20 percent  owners of the
  corporation.  If this latter  provision is enacted as  proposed,  CIGNA does not
  anticipate  that it will have a material effect on its  consolidated  results of
  operations, liquidity, or financial condition, although it could have a material
  adverse effect on the results of operations of the Employee  Retirement Benefits
  and Investment Services segment.
  
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance  products.  CIGNA does not expect this  legislation to have a material
  adverse effect on its
  
                                         9
  consolidated results of operations, liquidity or financial condition.
  
  In 1998,  the National  Association  of Insurance  Commissioners  (NAIC) adopted
  risk-based capital guidelines for health maintenance organizations (HMOs). CIGNA
  expects its HMO subsidiaries to be adequately capitalized under these guidelines
  as they become effective in various jurisdictions in 1999.
  
  In 1998, the NAIC adopted standardized  statutory accounting  principles.  Since
  these  principles have not been adopted by most of the insurance  departments of
  various jurisdictions in which CIGNA's insurance subsidiaries are domiciled, the
  timing and effects of implementation have not yet been determined.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains uncertain.
  
  Litigation
  
  CIGNA is continuously  involved in numerous lawsuits arising, for the most part,
  in the ordinary course of the business of  administering  and insuring  employee
  benefits programs.  While the outcome of litigation cannot be determined,  CIGNA
  does not expect that litigation  currently  threatened or pending will result in
  losses that differ from  recorded  reserves by amounts that would be material to
  results of operations, liquidity or financial condition.
  
  Brazilian Investment
  
  CIGNA is  currently  evaluating  alternatives  relative to its  investment  in a
  Brazilian health care operation. This evaluation could result in changes in this
  operation  and  a  possible  impairment  of up to  approximately  $325  million,
  representing  the carrying value of the investment as of July 31, 1999 and other
  costs.  A decision is expected  later in 1999.  While CIGNA does not expect that
  any charges  resulting from this evaluation will be material to its liquidity or
  financial  condition,  they  could be  material  to  CIGNA's  future  results of
  operations.
  
                                         10
  Item 2.       Management's Discussion and Analysis of
                Financial Condition and Results of Operations
  
  INTRODUCTION
  
  The following  discussion addresses the financial condition of CIGNA Corporation
  (CIGNA) as of June 30, 1999, compared with December 31, 1998, and its results of
  operations for the quarter and six months ended June 30, 1999, compared with the
  same periods  last year.  This  discussion  should be read in  conjunction  with
  Management's  Discussion and Analysis  included in CIGNA's 1998 Annual Report to
  Shareholders  (pages 10  through  24),  to which  the  reader  is  directed  for
  additional  information.  Due to the  seasonality of certain  aspects of CIGNA's
  business,  caution should be used in estimating  results for the full year based
  on interim results of operations.
  
  Acquisitions and Dispositions
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  The after-tax gain
  on sale,  which  will be  recognized  in  discontinued  operations  in the third
  quarter, was approximately $1.2 billion.  CIGNA's priorities for use of capital,
  including proceeds from the sale, are internal growth,  acquisitions,  and share
  repurchases.
  
  In the second  quarter of 1999,  CIGNA began  reporting  the sold  property  and
  casualty  business as  discontinued  operations  and  reclassified  prior period
  financial information accordingly.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain,  which  CIGNA  recognized  in the second  quarter,  was $43 million and is
  reported in the International Life, Health and Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining basis. CIGNA recognized $16 million of the deferred gain in the second
  quarters  of 1999 and 1998,  and $31  million and $33 million for the six months
  ended June 30, 1999 and 1998, respectively.
  
  CIGNA continues to conduct  strategic and financial reviews of its businesses in
  order to  deploy  its  capital  most  effectively.  See  page 16 for  discussion
  regarding CIGNA's Brazilian  investments and Note 3 to the Financial  Statements
  for additional information on acquisitions and dispositions.
  
  Cost Reduction Initiatives
  
  In the  fourth  quarter  of  1997,  CIGNA  adopted  a  cost  reduction  plan  to
  restructure  its health care  operations,  which resulted in a pre-tax charge of
  $32 million  ($22 million  after-tax)  in the  Employee  Health  Care,  Life and
  Disability Benefits segment.  The charge consisted primarily of costs related to
  severance  and vacated  lease  space.  The cash  outlays  associated  with these
  initiatives  will continue through 1999 with most having occurred in 1998. These
  initiatives  are expected to result in annual  after-tax  expense savings of $50
  million with approximately  two-thirds of the savings having emerged in 1998 and
  the full amount expected in 1999.
  
  See  Note 8 to the  Financial  Statements  for  additional  information  on cost
  reduction initiatives.
  
  Other Matters
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative  and  regulatory  environment  that could affect  them.  Some of the
  changes include initiatives to:
  
  o    increase health care regulation;
  o    restrict  insurance pricing and the application of underwriting  standards;
       and
  o    revise federal tax laws.
  
  In early 1999, the Administration proposed a federal budget that would eliminate
  the  deferral  of  taxation  of  certain  statutory  income  of  life  insurance
  companies.  As discussed in Note 9 to the
  
                                         11
  Financial  Statements,  CIGNA has not provided for taxes on $450 million of such
  income.  If the  proposal is enacted,  CIGNA will record  additional  income tax
  expense of $158 million for the resulting liability. The proposed federal budget
  also would limit the deduction of interest  expense on the general  indebtedness
  of corporations owning non-leveraged  corporate life insurance policies covering
  the lives of officers,  employees or directors who are not 20 percent  owners of
  the corporation. If this latter provision is enacted as proposed, CIGNA does not
  anticipate  that it will have a material effect on its  consolidated  results of
  operations, liquidity, or financial condition, although it could have a material
  adverse effect on the results of operations of the Employee  Retirement Benefits
  and Investment Services segment.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains  uncertain.  For  additional  information,  see Note 9 to the  Financial
  Statements.
  
  Recent Accounting Pronouncements
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily related to the property and casualty business, which has been sold and
  which is reported as discontinued operations, as discussed above.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations,  liquidity or financial condition.  In
  1998,  the  Financial  Accounting  Standards  Board (FASB)  issued  Statement of
  Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
  Instruments and Hedging  Activities."  SFAS No. 133 requires that derivatives be
  reported  on the balance  sheet at fair  value.  Changes in fair value are to be
  recognized  in net income or,  for  derivatives  that are  hedging  market  risk
  related to future cash flows,  in the  accumulated  other  comprehensive  income
  section of shareholders' equity. Implementation is required by the first quarter
  of 2001,  with the  cumulative  effect of adoption  reflected  in net income and
  accumulated other comprehensive income, as appropriate. CIGNA has not determined
  the effect or timing of implementation of this pronouncement.
  
  CONSOLIDATED RESULTS OF OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                        Ended                      Ended
                                       June 30,                   June 30,
  (In millions)                  1999          1998          1999          1998
  --------------------------------------------------------------------------------
  CONTINUING
  OPERATIONS:
  Premiums and fees            $3,724        $3,354        $7,311        $6,570
  Net investment income           734           789         1,455         1,578
  Other revenues                  226           168           404           635
  Realized investment
    gains                          13            39            24            79
                              -------------------------------------------------
  Total revenues                4,697         4,350         9,194         8,862
  Benefits and expenses         4,228         3,965         8,357         7,794
                              -------------------------------------------------
  Income before taxes             469           385           837         1,068
  Income taxes                    166           136           298           380
                              -------------------------------------------------
  Income from
    continuing operations         303           249           539           688
  Less realized
    investment gains,
    net of taxes                    9            26            16            52
  ------------------------------------------------------------------------------
  Operating income*            $  294        $  223        $  523        $  636
  ----------------------------=================================================
  
  CIGNA's consolidated operating income (as defined in the footnote below) for the
  second quarter of 1999 included a $43 million  after-tax gain  recognized on the
  sale of a 29% interest in its Japanese life  insurance  operations.  For the six
  months  of  1998,  operating  income  included  a $202  million  after-tax  gain
  recognized  on the  sale  of  CIGNA's  individual  life  insurance  and  annuity
  
  ____________________
  * Operating  income (loss) is defined as net income (loss)  excluding  after-tax
  realized  investment  results,  the results of  discontinued  operations and, in
  1999, the cumulative effect of adopting a new accounting pronouncement.
  
                                         12
  business.  Excluding  these  items,  operating  income was $251 million and $480
  million for the second  quarter and six months of 1999,  respectively,  compared
  with $223 million and $434 million for the same periods last year.  The increase
  for the second quarter and six month periods primarily reflects improved results
  in CIGNA's Employee Health Care, Life and Disability Benefits segment.
  
  After-tax realized investment results of the continuing operations decreased 65%
  and 69% in the second  quarter  and six months of 1999  versus the same  periods
  last year. These decreases primarily reflect lower gains on sales of real estate
  partnerships and equity securities.  For additional  information,  see Note 4 to
  the Financial Statements.
  
  Excluding the $43 million and $202 million after-tax gains mentioned above, full
  year operating income (which excludes results of discontinued operations and the
  gain on sale of the property  and  casualty  business) is expected to improve in
  1999 over 1998;  however,  such improvement  could be adversely  affected by the
  factors noted in the cautionary statement on page 22.
  
  EMPLOYEE HEALTH CARE, LIFE AND DISABILITY BENEFITS
  
  ------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                       Ended                       Ended
                                      June 30,                   June 30,
  (In millions)                  1999          1998          1999          1998
  ------------------------------------------------------------------------------
  Premiums and fees            $3,064        $2,836        $6,040        $5,573
  Net investment income           149           142           287           285
  Other revenues                  155           137           315           266
                              --------------------------------------------------
  Segment revenues              3,368         3,115         6,642         6,124
  Benefits and expenses         3,103         2,889         6,133         5,690
                              --------------------------------------------------
  Income before taxes             265           226           509           434
  Income taxes                     92            83           179           160
                              --------------------------------------------------
  Operating income             $  173        $  143        $  330        $  274
  ----------------------------==================================================
  Realized investment
  gains, net of taxes          $    3        $   18        $    9        $   36
  ----------------------------==================================================
  
  Operating  income for the Employee  Health Care,  Life and  Disability  Benefits
  segment  increased  21% and 20% for the second  quarter  and six months of 1999,
  compared with the same periods last year. Operating income for the Indemnity and
  HMO operations was as follows:
  
  ------------------------------------------------------------------------
                                 Three Months            Six Months
                                    Ended                  Ended
                                   June 30,               June 30,
  (In millions)               1999        1998        1999        1998
  ------------------------------------------------------------------------
  Indemnity operations        $ 78        $ 73        $141        $142
  HMO operations                95          70         189         132
  ------------------------------------------------------------------------
  Total                       $173        $143        $330        $274
  ========================================================================
  
  Indemnity  operating income increased 7% for the second quarter and decreased 1%
  for the six months of 1999  compared  with the same  periods  last  year.  These
  changes primarily reflect improved guaranteed cost medical claims experience and
  improved  group life business  partially  offset for the second quarter and more
  than  offset for the six months of 1999 by lower  earnings  on  experience-rated
  medical  business.
  
  HMO operating  results for the second quarter and six months of 1999 include net
  favorable  after-tax  adjustments  of $6 million and $12 million  resulting from
  account and tax  reviews.  HMO results for the second  quarter and six months of
  1998 include net unfavorable  after-tax  adjustments of $6 million primarily for
  uncollectible  receivables of a health care service  business.  Excluding  these
  adjustments,  HMO  results  were $89  million  and $177  million  for the second
  quarter and six months of 1999, respectively, compared with $76 million and $138
  million  for the  same  periods  last  year.  These  improvements  reflect  rate
  increases  for  guaranteed  cost HMO business,  improved  results in health care
  services   operations,   and  membership  growth  in  HMO  experience-rated  and
  alternative funding business.
  
  Premiums  and fees  increased  8% for the second  quarter and six months of 1999
  compared to the same periods last year.  These increases  primarily  reflect HMO
  and medical indemnity membership growth and rate increases.
  
                                         13
  Net investment  income increased 5% and 1% for the second quarter and six months
  of 1999  compared to the same  periods of 1998.  For the  quarter,  the increase
  reflects growth in invested  assets and higher  investment  yields.  For the six
  months, the growth in assets was partially offset by lower investment yields.
  
  As of June 30,  1999,  total  HMO  membership  was  approximately  6.6  million,
  representing  an increase of 4% since June 30,  1998 and 2% since  December  31,
  1998. These increases  primarily reflect  membership growth in  experience-rated
  and alternative  funding  programs,  partially  offset by declines in guaranteed
  cost HMO membership.  Under alternative  funding programs,  the customer assumes
  all or a portion of the  responsibility  for funding claims, and CIGNA generally
  earns a lower margin than under traditional programs.
  
  Management  believes  that  adding  premium  equivalents  to  premiums  and fees
  (adjusted  premiums  and fees)  produces a more  meaningful  measure of business
  volume.  Premium  equivalents  generally represent paid claims under alternative
  funding programs, such as minimum premium and Administrative Services Only (ASO)
  plans.  Premium  equivalents  for the second quarter and six months of 1999 were
  $3.9 billion and $7.4 billion,  respectively.  These amounts represent increases
  of 21% and 16%  compared  with the  same  periods  last  year.  These  increases
  primarily reflect HMO and PPO membership  growth.  Premium  equivalents were 55%
  and 53% of total adjusted premiums and fees for the six months of 1999 and 1998,
  respectively.   Premium   equivalents   related  to  ASO  plans   accounted  for
  approximately 51% and 49% of total adjusted premiums and fees for the six months
  of 1999 and 1998.
  
   EMPLOYEE RETIREMENT BENEFITS AND INVESTMENT SERVICES
  
  -----------------------------------------------------------------------
  FINANCIAL SUMMARY               Three Months            Six Months
                                     Ended                  Ended
                                    June 30,               June 30,
  (In millions)                1999        1998        1999        1998
  -----------------------------------------------------------------------
  
  Premiums and fees            $ 71        $ 73        $133        $144
  Net investment income         403         414         790         824
                              -----------------------------------------
  Segment revenues              474         487         923         968
  Benefits and expenses         375         397         731         789
                              -----------------------------------------
  Income before taxes            99          90         192         179
  Income taxes                   32          30          62          58
                              -----------------------------------------
  Operating income             $ 67        $ 60        $130        $121
  ----------------------------=========================================
  Realized investment
  gains, net of taxes          $  6        $  7        $  7        $ 13
  ----------------------------=========================================
  
  Operating income for the Employee  Retirement  Benefits and Investment  Services
  segment  includes  favorable  non-recurring   adjustments  totaling  $3  million
  after-tax in the second quarter and six months of 1999.  Excluding  these items,
  results  for the  second  quarter  and six  months  of 1999,  were $64 and $127,
  respectively,  compared with $60 and $121 for the same periods last year.  These
  increases  in 1999 over 1998 reflect  higher  earnings  from an increased  asset
  base,  partially  offset by a shift to lower margin products  (separate  account
  equity funds).
  
  Premiums and fees for the second quarter and six months of 1999 decreased 3% and
  8%, respectively, compared with the same periods last year, reflecting a decline
  in annuity sales partially offset by higher fees from separate accounts.
  
  Net investment  income decreased 3% and 4% for the second quarter and six months
  of 1999,  primarily  reflecting lower investment yields and customers' continued
  redirection  of a portion  of their  investments  from the  general  account  to
  separate accounts.
  
                                         14
  Assets under  management  are generally a key  determinant  of earnings for this
  segment.  For the six months ended June 30, assets under  management and related
  activity, including amounts attributable to separate accounts, were as follows:
  
  --------------------------------------------------------------------
  (In millions)                                 1999             1998
  --------------------------------------------------------------------
  Balance - January 1                       $ 52,929         $ 48,231
  Premiums and deposits                        4,063            4,079
  Investment results                           1,913            1,585
  Increase in fair value of assets               594            2,006
  Customer withdrawals                        (2,994)          (2,271)
  Other, including participant
    withdrawals and benefit payments          (2,772)          (2,962)
  --------------------------------------------------------------------
   Balance - June 30                        $ 53,733         $ 50,668
  ====================================================================
  
  For the six months of 1999 and 1998, approximately 64% and 53%, respectively, of
  premiums and deposits reflect recurring  deposits from existing  customers while
  the  remaining  amounts  represent  sales to new customers and new plan sales to
  existing customers.  Investment results increased 21% in the six months of 1999,
  compared with the same period in 1998.  This increase  reflects  higher realized
  capital gains and growth in assets, partially offset by lower investment yields.
  The fair value of assets  increased  less in 1999 than in 1998  primarily due to
  lower net  appreciation  of separate  accounts and market value  depreciation of
  general  account  fixed  maturities.  The  increase in customer  withdrawals  is
  primarily due to the effect of withdrawals under defined  contribution  business
  in the first quarter of 1999.
  
  Assets  under   management   will  continue  to  be  affected  by  market  value
  fluctuations for fixed maturities and equity securities.
  
  See Other Matters on page 11 for additional information regarding corporate life
  insurance.
  
   INTERNATIONAL LIFE, HEALTH AND EMPLOYEE BENEFITS
  
  -----------------------------------------------------------------------------
  FINANCIAL SUMMARY                Three Months               Six Months
                                      Ended                      Ended
                                     June 30,                   June 30,
  (In millions)                 1999          1998         1999          1998
  -----------------------------------------------------------------------------
  
  Premiums and fees            $ 416         $ 309        $ 794         $ 586
  Net investment income           32            29           62            56
  Other revenues                  66            --           71             1
                              -----------------------------------------------
  Segment revenues               514           338          927           643
  Benefits and expenses          441           327          846           618
                              -----------------------------------------------
  Income before taxes             73            11           81            25
  Income taxes                    29             4           34             9
                              -----------------------------------------------
  Operating income             $  44         $   7        $  47         $  16
  ----------------------------===============================================
  Realized investment
  losses, net of taxes         $  (1)          $--        $  (1)          $--
  ----------------------------===============================================
  
  Results for the International Life, Health and Employee Benefits segment for the
  second quarter and six months of 1999 include a pre-tax gain of $66 million ($43
  million after-tax)  included in Other Revenues from the April 1999 sale of a 29%
  interest  in  CIGNA's  Japanese  life  insurance  operations.  Operating  income
  associated  with the 29%  interest  that was sold was $2  million  for the first
  quarter of 1999; $3 million and $5 million for the second quarter and six months
  of 1998, respectively; and $10 million for the full year of 1998.
  
  Excluding the gain on sale noted above,  operating  income was $1 million and $4
  million  for the  second  quarter  and six  months  of 1999,  respectively.  The
  declines from the same periods last year are primarily attributable to losses in
  the 1999 periods of $8 million and $15 million  after-tax from Brazilian  health
  care  operations.  CIGNA's  health care  operations in Brazil  include a managed
  health care business, which is being consolidated,  and an investment in another
  health care operation, which is being accounted for under the equity method.
  
                                         15
  Premiums and fees  increased  35% for the second  quarter and six months of 1999
  compared with the same periods last year.  Excluding  premiums and fees from the
  Brazilian  managed  health care business  (which is being  consolidated  and was
  acquired  in the  second  half of 1998)  and the  effects  of  foreign  currency
  changes,  premiums and fees  increased 24% for the second quarter and six months
  of 1999.  These increases  reflect growth in Japanese life insurance  operations
  and, to a lesser extent, growth in life and group benefits business in Southeast
  Asia as well as higher health care premiums and fees for expatriate employees of
  multinational companies.
  
  Net  investment  income for the second  quarter and six months of 1999 increased
  10% and 11%,  respectively,  compared with the same periods last year. Excluding
  the  effects  of  foreign  currency  changes,   the  increase  was  9%  and  7%,
  respectively. These increases reflect growth in invested assets partially offset
  by lower yields.
  
  CIGNA has expanded its  international  operations,  principally  in Brazil,  and
  expects to continue to pursue  international  growth  through  acquisitions  and
  other  investments.  CIGNA  expects this growth to result in start-up  costs and
  initial losses.
  
  CIGNA is  continuing  efforts to improve  results in its  Brazilian  health care
  operations, including initiatives to improve the pricing of medical products and
  services and to provide for enhanced medical cost controls.
  
  In  addition,  CIGNA  is  currently  evaluating  alternatives  relative  to  its
  investment in the Brazilian  health care  operation  that is accounted for under
  the equity method.  This evaluation  could result in changes in this health care
  operation  and  a  possible  impairment  of up to  approximately  $325  million,
  representing  the carrying value of the investment as of July 31, 1999 and other
  costs.  A decision is expected  later in 1999.  While CIGNA does not expect that
  any charges  resulting from this evaluation will be material to its liquidity or
  financial  condition,  they  could be  material  to  CIGNA's  future  results of
  operations.
  
  OTHER OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months                Six Months
                                        Ended                     Ended
                                       June 30,                  June 30,
  (In millions)                  1999          1998          1999          1998
  --------------------------------------------------------------------------------
  
  Premiums and fees            $  173        $  136        $  344        $  267
  Net investment income           146           196           307           394
  Other revenues                   49            53            97           417
                             --------------------------------------------------
  Segment revenues                368           385           748         1,078
  Benefits and expenses           311           344           645           675
                             --------------------------------------------------
  Income before taxes              57            41           103           403
  Income taxes                     20            12            36           141
                             --------------------------------------------------
  Operating income             $   37        $   29        $   67        $  262
  ---------------------------==================================================
  Realized investment
  gains, net of taxes          $    1        $    1        $    1        $    3
  ---------------------------==================================================
  
  Other Operations consist of:
  
  o    gain  recognition  related to the sale of the individual life insurance and
       annuity business;
  o    corporate life insurance on which policy loans are  outstanding  (leveraged
       corporate life insurance);
  o    life, accident and health reinsurance operations;
  o    settlement annuity business; and
  o    certain new business initiatives.
  
  Operating  income for the six months of 1998 includes an after-tax  gain of $202
  million  recognized  on the sale of the  individual  life  insurance and annuity
  business.  The gain was $316 million on a pre-tax basis and is reported in Other
  Revenues. Excluding this amount, operating income for the second quarter and six
  months of 1999 was $37  million and $67  million,  respectively,  compared  with
  operating  income of $29 million and $60 million for the second  quarter and six
  months of 1998. The 1999 increases reflect growth in accident and specialty life
  reinsurance products.
  
  For the second  quarter and six months of 1999,  premiums and fees increased 27%
  and 29% from the same periods of 1998.  These  increases  also reflect growth in
  accident and specialty life reinsurance  products  partially offset by declining
  health reinsurance premiums.
  
  Net  investment  income  decreased  26% and 22% for the second  quarter  and six
  months of 1999 compared with the same periods of 1998. These decreases primarily
  reflect lower assets from leveraged  corporate life insurance,  and, to a lesser
  extent, lower yields.
  
                                         16
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance  products.  For the second quarter and six months of 1999, revenues of
  $82 million and $190 million, and operating income of $9 million and $19 million
  were from products that are affected by this legislation.  CIGNA does not expect
  this legislation to have a material  adverse effect on its consolidated  results
  of operations, liquidity or financial condition.
  
  The specialty life reinsurance  products of this segment include  contracts that
  guarantee payments for specified unfavorable changes in variable annuity account
  values based on underlying  mutual fund investments if account holders expire or
  elect to  receive  periodic  income  payments.  Although  these  guarantees  may
  adversely affect CIGNA's  consolidated  results of operations in future periods,
  they are not expected to have a material adverse effect on CIGNA's  liquidity or
  financial condition.
  
  The  personal   accident   reinsurance   business  of  this   segment   includes
  participation in a workers'  compensation  program managed by Unicover Managers,
  Inc. where disputes have arisen regarding retrocessional coverage. Resolution of
  these disputes is likely to take several  years.  CIGNA does not expect to incur
  losses  material  to  its  consolidated  results  of  operations,  liquidity  or
  financial condition related to this program.
  
  CORPORATE
  
  --------------------------------------------------------------------------
  FINANCIAL SUMMARY         Three Months               Six Months
                               Ended                      Ended
                              June 30,                   June 30,
  (In millions)          1999          1998          1999          1998
  --------------------------------------------------------------------------
  Operating loss        $ (27)        $ (16)        $ (51)        $ (37)
  ----------------------====================================================
  
  Corporate is used to report amounts not allocated to segments,  such as interest
  expense and  intersegment  eliminations.  The increases in the operating loss in
  the second quarter and six months of 1999 primarily  reflect higher  unallocated
  expenses  and lower net  investment  income  due to a  reduction  in  investment
  assets.  Results for all periods include  certain  corporate  overhead  expenses
  which previously had been allocated to the property and casualty operations.
  
  PROPERTY AND CASUALTY DISCONTINUED OPERATIONS
  -----------------------------------------------------------------------------------------
  FINANCIAL SUMMARY                        Three Months                    Six Months
                                              Ended                           Ended
                                             June 30,                       June 30,
  (In millions)                        1999            1998           1999            1998
  -----------------------------------------------------------------------------------------
  Premiums and fees                 $   735         $   761        $ 1,411         $ 1,446
  Net investment income                 131             153            268             301
  Other revenues                         61              65            136             130
  Realized investment gains              17               8             48              27
                                   -------------------------------------------------------
  Total revenues                        944             987          1,863           1,904
  Benefits and expenses               1,054             901          1,911           1,733
                                   -------------------------------------------------------
  Income (loss) before taxes           (110)             86            (48)            171
  Income taxes (benefits)               (39)             27            (20)             56
  ----------------------------------------------------------------------------------------
  Income (loss) from
    discontinued operations         $   (71)        $    59        $   (28)        $   115
  --------------------------------========================================================
  On July 2, 1999, CIGNA sold its property and casualty business. See Acquisitions
  and  Dispositions  on page 11 for additional  information.  Amounts in the table
  above are excluded from CIGNA's results of continuing operations.
  
  The decline in results of the discontinued  operations for the second quarter of
  1999 compared with the prior year is primarily  attributable  to a charge of $67
  million  after-tax  resulting  from  account and other  financial  reviews of an
  insurance-related  service business. The decline also reflects unfavorable claim
  experience,  lower  results from  insurance-related  service  business,  and the
  effects  of  continued  competitive  conditions  in the  property  and  casualty
  insurance markets.
  
  For the six months of 1999,  the decline also  reflects  unfavorable  prior year
  loss development in the international property and casualty operations primarily
  related to catastrophe losses.
  
  The  adverse  pre-tax  effects of prior year  development  on the results of the
  discontinued  operations were $64 million and $50 million for the second quarter
  of 1999 and 1998 (including asbestos and environmental losses of $40 million and
  $27  million  for the same  periods).  For the six months of 1999 and 1998,  the
  adverse  pre-tax effects were $131 million and $98 million  (including  asbestos
  and environmental losses of $81 million and $52 million for the same periods).
  
                                         17
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity  for CIGNA  and its  insurance  subsidiaries  has  remained  strong as
  evidenced by  significant  amounts of short-term  investments  and cash and cash
  equivalents   in  the  aggregate.   Generally,   CIGNA  has  met  its  operating
  requirements  by maintaining  appropriate  levels of liquidity in its investment
  portfolio and through utilization of overall positive cash flows.
  
  For the six months of 1999, cash and cash  equivalents of continuing  operations
  decreased  approximately $700 million from $2.0 billion as of December 31, 1998.
  This decrease  primarily  reflects  payments of dividends on and  repurchases of
  CIGNA common stock ($753  million),  cash used for  investing  activities  ($452
  million),  and net withdrawals from contractholder deposit funds ($255 million),
  partially  offset  by cash  provided  by  operating  activities  ($710  million)
  reflecting earnings and the timing of operating cash receipts and disbursements.
  
  On July 2, 1999,  CIGNA  received $3.45 billion in cash upon closing of the sale
  of its property and casualty business.
  
  CIGNA's  capital  resources  represent  funds  available for long-term  business
  commitments.  They primarily  consist of retained earnings and proceeds from the
  issuance of long-term debt and equity  securities.  CIGNA's  financial  strength
  provides the capacity and flexibility to enable it to raise funds in the capital
  markets  through the  issuance of such  securities.  CIGNA  continues to be well
  capitalized, with sufficient borrowing capacity to meet the anticipated needs of
  its businesses.
  
  CIGNA had $1.4  billion of long-term  debt  outstanding  at June 30,  1999,  and
  December  31,  1998.  As of June 30, 1999,  CIGNA had  approximately  $1 billion
  remaining  under  effective  shelf   registration   statements  filed  with  the
  Securities and Exchange Commission that may be issued as debt securities, equity
  securities  or both,  depending  upon  market  conditions  and  CIGNA's  capital
  requirements.
  
  At June 30, 1999, CIGNA's short-term debt amounted to $307 million,  an increase
  of $35 million from December 31, 1998.
  
  CIGNA has  repurchased  approximately  8,766,000  shares of its common stock for
  $770 million  during  1999,  including  1,237,500  shares  repurchased  for $112
  million from July 1 through July 31, 1999.  On July 28, 1999,  CIGNA's  Board of
  Directors  authorized an additional $1 billion of share  repurchases.  The total
  remaining authorization as of July 31, 1999 was $1.02 billion.
  
  INVESTMENT ASSETS - CONTINUING OPERATIONS
  
  ------------------------------------------------------------
                                       June 30,  December 31,
  (In millions)                           1999           1998
  ------------------------------------------------------------
  Fixed maturities                     $23,121        $24,270
  Equity securities                        541            477
  Mortgage loans                        10,115          9,599
  Real estate                              798            733
  Other, primarily policy loans          4,063          6,597
  ------------------------------------------------------------
  Total investment assets              $38,638        $41,676
  ============================================================
  
  Additional information regarding CIGNA's investment assets is included in Note 4
  to the second quarter 1999 Financial Statements and Notes 2, 4 and 5 to the 1998
  Financial Statements as well as the 1998 Form 10-K.
  
  Investment  assets as of June 30, 1999 decreased 7% from December 31, 1998. This
  decrease  primarily  reflects a decline of approximately  $2.4 billion in policy
  loans due to surrenders of leveraged  corporate  life  insurance  policies and a
  reduction in the fair value of fixed  maturities of  approximately  $1.1 billion
  due to increases in interest rates.
  
  Significant   amounts  of  CIGNA's   investment   assets  are   attributable  to
  experience-rated   contracts  with   policyholders   (policyholder   contracts).
  Approximate  percentages of investments  attributable to policyholder  contracts
  were as follows:
  
  --------------------------------------------
                     June 30,   December 31,
                        1999           1998
  --------------------------------------------
  Fixed maturities        40%           39%
  Mortgage loans          58%           57%
  Real estate             65%           63%
  --------------------------------------------
  
                                         18
  Fixed Maturities
  
  Investments in fixed  maturities  (bonds)  include  publicly  traded and private
  placement debt securities;  asset-backed  securities,  including  collateralized
  mortgage obligations (CMOs); and redeemable preferred stocks.
  
  As of June 30, 1999, the fair value of fixed maturities,  including policyholder
  share,  was greater than  amortized  cost by $496  million,  compared  with $1.6
  billion as of December 31, 1998.  The decrease is primarily  attributable  to an
  increase in interest rates during the six months of 1999.
  
       Potential Problem and Problem Bonds
  
  Potential  problem  bonds are fully  current  but judged by  management  to have
  certain  characteristics that increase the likelihood of problem classification.
  CIGNA had $54 million of potential problem bonds, including amounts attributable
  to policyholder  contracts, as of June 30, 1999, compared with $58 million as of
  December 31, 1998. These amounts are net of cumulative write-downs of $5 million
  as of both dates.
  
  CIGNA considers bonds that are delinquent or restructured as to terms, typically
  interest rate and in certain cases maturity date,  problem bonds. As of June 30,
  1999  and  December  31,  1998,  CIGNA  had  problem  bonds,  including  amounts
  attributable to policyholder contracts, of $165 million and $108 million, net of
  related  cumulative  write-downs  of $27 million and $19 million,  respectively.
  Problem  bonds  included  $14 million and $3 million,  respectively,  related to
  emerging  market  investments  as of June 30, 1999 and December 31, 1998.  CIGNA
  recognizes interest income on problem bonds only when payment is received.
  
  Mortgage Loans
  
  --------------------------------------------------------------
                                      June 30,    December 31,
                                         1999            1998
  --------------------------------------------------------------
  Mortgage loans (in millions)        $10,115         $ 9,599
  Property type:
   Office buildings                        39%             37%
   Retail facilities                       33              34
   Apartment buildings                     14              15
   Industrial                               6               7
   Hotels                                   6               5
   Other                                    2               2
  Total                                   100%            100%
  --------------------------------------------------------------
  
  CIGNA's  investment  strategy  requires  diversification  of the  mortgage  loan
  portfolio. This strategy includes guidelines relative to property type, location
  and borrower to reduce its exposure to potential losses.
  
       Potential Problem and Problem Mortgage Loans
  
  Potential problem mortgage loans include:
  o    fully  current  loans  that  are  judged  by  management  to  have  certain
       characteristics that increase the likelihood of problem classification;
  o    fully current loans for which the borrower has requested restructuring; and
  o    loans  that  are 30 to 59 days  delinquent  with  respect  to  interest  or
       principal payments.
  
  CIGNA had potential problem mortgage loans,  including  amounts  attributable to
  policyholder  contracts,  of $54 million as of June 30, 1999, and $55 million as
  of December 31, 1998. There were no valuation  reserves related to these amounts
  in either period.
  
  CIGNA's  problem  mortgage loans include  delinquent and  restructured  mortgage
  loans. Delinquent mortgage loans include those on which payment is overdue by 60
  days or more.  Restructured mortgage loans are those whose basic financial terms
  have been modified, typically to reduce the interest rate or extend the maturity
  date.
  
                                         19
  CIGNA had problem mortgage loans, including amounts attributable to policyholder
  contracts,  of $96 million and $98 million, as of June 30, 1999 and December 31,
  1998, net of valuation reserves of $6 million as of both dates. CIGNA recognizes
  interest income on problem mortgage loans only when payment is received.
  
  Real Estate
  
  As of June 30, 1999 and  December  31,  1998,  investment  real  estate,  net of
  reserves  and  write-downs,   included:   1)  $449  million  and  $390  million,
  respectively,  of real estate  held for the  production  of income,  and 2) $349
  million and $343 million,  respectively, of real estate held for sale, primarily
  properties acquired as a result of foreclosure of mortgage loans.
  
  Summary
  
  The effects of  write-downs,  changes in  valuation  reserves  and  non-accruals
  related to  investment  assets for the second  quarter and six months ended June
  30, 1999 and 1998 were not material to CIGNA's policyholder  contracts,  results
  of operations, liquidity or financial position.
  
  Additional  losses from problem  investments  are expected to occur for specific
  investments   in  the  normal  course  of  business.   Assuming  no  significant
  deterioration   in   economic   conditions,    including   further   significant
  deterioration  in Latin  American  and Asian  economies,  CIGNA  does not expect
  additional  non-accruals,  write-downs and reserves to materially  affect future
  results of  operations,  liquidity  or  financial  condition,  or to result in a
  significant decline in the aggregate carrying value of its assets.
  
  YEAR 2000
  
  CIGNA is highly  dependent  on  automated  systems and systems  applications  in
  conducting its  operations.  These systems include  information  technology (IT)
  systems  that are used for,  among other  things,  processing  claims,  billing,
  collecting  premiums  from  customers,   managing   investment   activities  and
  maintaining  management  information  systems.  If these  systems were unable to
  function because of failing to be Year 2000 ready,  CIGNA's business  operations
  would be  interrupted,  which  could have a material  adverse  effect on CIGNA's
  results of operations.
  
  CIGNA's Year 2000 efforts include: 1) identifying systems requiring remediation;
  2) assessing what is required to remediate those systems; 3) remediating systems
  to be ready for the Year 2000 (by either  modifying or replacing  them);  and 4)
  testing systems for Year 2000 readiness,  including that they properly interface
  with  systems  of  external   parties,   such  as  customers   and   third-party
  administrators.  CIGNA has completed the  identification  and assessment  phases
  with respect to its IT systems that are critical to  maintaining  operations  or
  where  the  failure  of those  systems  would  result  in  significant  costs or
  disruption  of operations  ("mission  critical  systems").  As of June 30, 1999,
  CIGNA has  substantially  completed the  remediation  and testing of its mission
  critical systems.
  
  CIGNA's  systems  also  include  non-IT  systems,  such as  telephone,  facility
  management  and other systems using  embedded  chips.  These non-IT systems were
  substantially Year 2000 ready as of June 30, 1999.
  
  CIGNA is using  both  internal  and  external  resources  to meet the  timetable
  established for completion of its Year 2000 efforts. The after-tax costs of Year
  2000  efforts  (including  amounts  related  to  discontinued  operations)  were
  approximately  $100  million in 1998 and are  expected to be  approximately  $45
  million in 1999. Year 2000 after-tax costs for the second quarter and six months
  of  1999  were   approximately  $10  million  and  $20  million,   respectively.
  Approximately  60% of total Year 2000 costs are attributable to existing systems
  resources  which have been  redirected to the Year 2000  efforts.  The remaining
  amounts  represent  incremental  costs for Year 2000 efforts.  Although  certain
  systems  development  efforts  have been  deferred in order to address Year 2000
  issues, CIGNA does not expect that this deferral will have a significant adverse
  effect on its results of operations or financial condition.
  
  CIGNA has relationships with various third-party entities in the ordinary course
  of business. For example,  CIGNA receives data from clients;  depends on others,
  such as third-party  administrators  and banks,  for services;  and bears credit
  risk on others,  such as  entities  in which it
  
                                         20
  invests.  CIGNA has identified  third-party entities critical to its operations,
  and it is  assessing  and  attempting  to mitigate its risks with respect to the
  potential  failure  of these  entities  to be Year 2000  ready by,  among  other
  things,  reviewing,  where possible,  their formal Year 2000 plans and obtaining
  Year 2000 readiness  affirmations from certain third-party entities. The effect,
  if any, on CIGNA's  results of  operations  from the  failure of these  entities
  (including  entities on which CIGNA bears  credit risk) to be Year 2000 ready is
  not reasonably estimable.
  
  While  CIGNA  expects  that its Year 2000  efforts  will be  successful,  it has
  completed a  comprehensive  analysis of the  operational  problems that would be
  reasonably  likely to result from the failure by CIGNA and certain third parties
  to complete efforts necessary to achieve Year 2000 compliance on a timely basis.
  CIGNA has  historically  had security and backup  policies  and  procedures  for
  safeguarding  critical  corporate  data. It is  supplementing  these policies by
  developing  Year  2000  contingency  plans  to  provide  for the  continuity  of
  operations  in the  event  of Year  2000  systems  failures  or the  failure  of
  third-party  entities  to be Year 2000  ready.  These  plans are  expected to be
  completed and tested prior to the end of 1999.
  
  The costs of CIGNA's Year 2000 efforts and the dates on which CIGNA  believes it
  will complete such efforts are based on management's best estimates,  which were
  derived  using  numerous  assumptions  regarding  future  events,  including the
  continued availability of certain resources,  third-party remediation plans, and
  other factors.  There can be no assurance that these  estimates will prove to be
  accurate,  and actual  results  could  differ  materially  from those  currently
  anticipated.  Specific  factors  that  could  cause  such  material  differences
  include, but are not limited to, the availability and costs of personnel trained
  in Year 2000 issues,  the ability to identify,  assess,  remediate  and test all
  relevant  computer  codes and  embedded  technology,  the risk  that  reasonable
  testing will not uncover all Year 2000 problems, and similar uncertainties.
  
                                         21
  CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF THE "SAFE  HARBOR"  PROVISIONS  OF THE
  PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  
  Except for historical  information provided in this Management's  Discussion and
  Analysis of  Financial  Condition  and Results of  Operations,  statements  made
  throughout  this  document are  forward-looking  and contain  information  about
  financial results,  economic conditions,  trends and known uncertainties.  CIGNA
  cautions  the reader that actual  results  could  differ  materially  from those
  expected by CIGNA,  depending on the outcome of certain  factors  (some of which
  are described with the forward-looking  statements) including: 1) an increase in
  medical  costs  in  CIGNA's  health  care  operations,  including  increases  in
  utilization  and  costs  of  medical   services;   2)  heightened   competition,
  particularly price competition, reducing product margins and constraining growth
  in CIGNA's businesses;  3) significant changes in interest rates; 4) significant
  stock market  declines  resulting  in payments  contingent  on certain  variable
  annuity account values;  5) the effect on CIGNA's  international  operations and
  investments from further  significant  deterioration in Latin American and Asian
  economies; 6) the results of the evaluation described on page 16 of alternatives
  related to an investment in Brazilian health care  operations;  and 7) proposals
  to change federal corporate income taxes.
  
                                         22
  Part II. OTHER INFORMATION
  
  Item 4.   Submission of Matters to a Vote of Security Holders.
  
            The Annual Meeting of  Shareholders  of CIGNA  Corporation was held on
            April 28,  1999.  At the meeting,  174,379,373  shares of Common Stock
            were  represented and entitled to vote as of March 1, 1999, the record
            date; 204,865,115 shares of Common Stock were outstanding and entitled
            to vote as of March 1,  1999,  the  record  date.  CIGNA  shareholders
            elected   nominees  to  the  Board  of  Directors   and  ratified  the
            appointment of  PricewaterhouseCoopers  LLP as independent accountants
            for 1999.
  Votes
                                                    Votes For          Withheld
                                                    ---------          --------
  Election of nominee to
            Board of Directors for
            term expiring in April, 2000
  
                   H. Edward Hanway                173,585,696         793,677
  
            Election of nominees to
            Board of Directors for
            terms expiring in April, 2002
  
                   Peter N. Larson                 173,617,899         761,474
                   Joseph Neubauer                 173,517,736         861,637
                   Carol Cox Wait                  173,578,954         800,419
                   Marilyn Ware                    173,602,102         777,271
  
            -----------------------------
  
                                                    Votes For      Votes Against      Abstentions
                                                    ---------      -------------      -----------
  
            Ratification of Pricewaterhouse-
            Coopers as Independent Accountants     173,908,589        94,963            375,821
  23
  Item  6.  Exhibits and Reports on Form 8-K.
  
            (a)  See Exhibit Index.
  
            (b)  During the  quarterly  period ended June 30, 1999,  and as of the
                 filing date, CIGNA filed the following Reports on Form 8-K:
  
                 o    dated  August 2, 1999,  Item 5 -  containing  a news release
                      regarding its second quarter 1999 results.
  
                 o    dated  July 2,  1999,  Item 2 -  containing  a news  release
                      regarding the sale of its P&C businesses to ACE.
  
                 o    dated  May 3,  1999,  Item  5 -  containing  a news  release
                      regarding its first quarter 1999 results.
  
                                         24
  SIGNATURE
  
           Pursuant to the requirements of the Securities Exchange Act of 1934,
  the registrant has duly caused this report to be signed by the undersigned duly
  authorized officer, on its behalf and in the capacity indicated.
  
                                                     CIGNA CORPORATION
  
                                                     By: /s/ James A. Sears
                                                         -------------------------
                                                         James A. Sears
                                                         Vice President and
                                                         Chief Accounting Officer
  
  Date: August 6, 1999
  
                                         25
  Exhibit Index
                                    -------------
  
                                                                 Method of
  Number         Description                                      Filing
  ------         -----------                                      ------
  
  10             Description of Stock Compensation           Filed herewith
                 Plan for Non-Employee Directors
                 of CIGNA Corporation (as amended
                 and restated, effective July 1, 1999)
  
  12             Computation of Ratio of                     Filed herewith
                 Earnings to Fixed Charges
  
  27.1           Financial Data Schedule                     Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.2           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.3           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
  27.4           Restated Financial Data Schedule            Included only in
                                                             the EDGAR version of
                                                             the Form 10-Q
  
                                         26