Aetna Expects Higher Third-Quarter Earnings

Full-year guidance raised

HARTFORD, Conn., October 9, 2002 — Aetna (NYSE: ΑET) today announced that it expects to report third quarter 2002 operating earnings of approximately $0.70 per share, excluding favorable prior-period developments that will be reported on Oct. 31 and the previously announced third-quarter severance and facilities charge.1

The company also said it now anticipates that full-year operating earnings, excluding other items, will be in the range of $2.20 to $2.25 per share. Previous guidance was $1.70-$1.75 per share. Guidance includes the $0.27 of favorable development reported in the second quarter of 2002, but does not include favorable prior-period developments for the third quarter. Aetna will provide full third-quarter financial results in its earnings press release and more details on its 8:30 a.m. conference call on Oct. 31.

"We are pleased to be able to provide this early, positive look at our third-quarter financial performance," Chairman and CEO John W. Rowe, M.D., said. "Our operating results this quarter demonstrate that our turnaround is progressing well, and that key components of our new operating model are having an even greater beneficial effect than anticipated. We believe it is important to share this information with our shareholders."

Aetna's strong financial performance this quarter was largely the result of improved margin results, driven by an increase in the premium yield and a continuation of the previously noted decline in the medical cost trend, combined with continued reductions in operating costs.

Aetna is one of the nation's leading providers of health, dental, group life, disability and long-term care benefits, serving 14.4 million health care members, 11.9 million dental members and 12 million group insurance customers as of June 30, 2002. The company has expansive nationwide networks of more than 527,000 health care services providers, including over 321,000 primary care and specialist physicians and 3,300 hospitals. For more information about Aetna, please visit the company's website at www.aetna.com.

1 Operating results exclude a previously announced severance and facilities charge of $58 million after tax, and other favorable prior-period developments to be reported on Oct. 31 as well as net realized capital gains (losses).

ADDITIONAL INFORMATION; CAUTIONARY STATEMENT -- Certain information in this press release is forward looking, including the earnings projections and statements regarding the turnaround. Forward-looking information is based on management's estimates, assumptions and projections, and is subject to significant uncertainties and other factors, many of which are beyond Aetna's control. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management. Those risk factors include, but are not limited to: unanticipated increases in medical costs (including increased medical utilization, increased pharmacy costs, increases resulting from unfavorable changes in contracting or recontracting with providers, changes in membership mix to lower-premium or higher-cost products or membership-adverse selection; as well as changes in medical cost estimates due to the necessary extensive judgment that is used in the medical cost estimation process, the considerable variability inherent in such estimates, and the sensitivity of such estimates to changes in medical claims payment patterns and changes in medical cost trends); increases in medical costs or Group Insurance claims resulting from the aftermath of the events of September 11, 2001 and the continued threat of terrorism; the ability to achieve targeted savings from work force reductions and to otherwise reduce administrative expenses in light of significant membership reductions being experienced in 2002; the ability to maintain targeted levels of service, and improve relations with providers, as well as operating performance, while making significant staff reductions and taking actions to reduce medical costs; the ability to successfully implement Aetna's new operating model; lower levels of investment income from continued lower interest rates; adverse government regulation (including legislative proposals to eliminate or reduce ERISA pre-emption of state laws that would increase potential litigation exposure, and other proposals, such as the Patients' Bill of Rights, that would increase potential litigation exposure or mandate coverage of certain health benefits); adverse pricing actions by government payors; changes in size, product mix and medical cost experience of membership in key markets, particularly given the significant membership reductions being experienced in 2002; and the outcome of litigation and regulatory matters, including numerous purported health care class actions and ongoing reviews of business practices by various regulatory agencies. For more discussion of important factors that may materially affect Aetna, please see the risk factors contained in Aetna's 2001 Report on Form 10-K, on file with the Securities and Exchange Commission. You also should read Aetna's 2001 Form 10-K and 2002 second quarter Form 10-Q filed with the Securities and Exchange Commission for a discussion of Aetna's historical results of operations and financial condition.



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