Aetna said on Friday its board has authorized the health insurer to buy back up to $1 billion of its stock, a show of confidence in the company's stock at a time of uncertainty in the industry.

Aetna, the No. 3 U.S. health insurer with a market value of about $11.5 billion, said it intends to continue buying shares in the open market from time to time. Its shares rose 1.2 percent to $27.83 on the New York Stock Exchange.

Earlier this week, Aetna posted better-than-expected second-quarter profit and raised its 2010 outlook.

However, its shares fell after the report as it failed to provide investors with a clear view on profits in 2011 as they wait for details on the country's healthcare reform.