So far in 2007, Aetna (NYSE:AET) has been the top-performing stock among the four health insurance companies that are largest by market cap. The company's Q3 results, which were reported before the opening bell yesterday, reinforced why that's been the case.

Aetna reported Q3 operating earnings per share which not only topped Wall Street estimates, but also came in 15% above the year-ago results. The company also reported an 11% year-over-year increase in total revenue. Both of these improvements were attributable to membership gains as well as premium and fee increases. The insurer's commercial medical benefit ratio came in at 78.6%, which was essentially unchanged in comparison to its 2006 ratio for the same quarter.

The strong results enabled the company to slightly up its full-year operating EPS forecast for 2007, as well as project operating EPS for 2008 to come in 15% above its 2007 guidance. The earnings numbers also led shares almost 6% higher yesterday, which was impressive for a company that commands a market cap of $29 billion and operates in an industry that has not had "growth" written all over it in recent months.

CIGNA (NYSE:CI), which was the top performer among this group last year, is set to report its results next Friday. We have already heard from UnitedHealth Group (NYSE:UNH) and WellPoint (NYSE:WLP) in recent days, both of which reported positive results, although nothing to jolt traders into action, as was the case with Aetna. My outlook for this group had been somewhat tepid as of late, but I am now fairly bullish on Aetna after its Q3 results, and I think that CIGNA could give Aetna a run for its money after it reports next week.

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