Nov 5 (Reuters) – Cigna on Thursday raised its annual profit forecast after beating third-quarter results, as the health insurer benefits from gains in its specialty-pharmacy and health-services businesses.
The company has reduced exposure to high-cost government-backed plans, and shifted focus to its core traditional employer-sponsored healthcare business and the pharmacy benefits management unit.
It exited it Medicare Advantage business last year, and said it will also end Affordable Care Act plan coverage at the end of 2026.
The company said it expects a boost to customer growth and margin improvement in certain employer-backed plans next year.
It reiterated its 2027 growth forecast, even though it said it expects a host of challenges, including those arising from its exit from the Obamacare market, lower drug rebates, reduced employer coverage of weight-loss drugs and fewer launches of lower-cost versions of specialty medicines.
Cigna forecast adjusted profit to grow at least 10% in 2027.
“Overall, the environment driving 2027 is mixed, and company execution will be important as Cigna seeks to regain investor confidence and drive an improved multiple,” Bernstein analyst Lance Wilkes said.
Shares of the company were up 2.3% in premarket trading.
Medical loss ratio, or the percentage of premiums spent on patient care, rose to 85% in the third quarter from 84.8% a year earlier, due to changes in its US-employer insurance business.
Analysts had expected a medical cost ratio of 85.18%, as per data compiled by LSEG.
Evernorth Health Services, which includes Cigna’s pharmacy-benefit, specialty-pharmacy and care-services businesses, posted adjusted revenue of $63.77 billion, up about 6% from a year earlier.
The company in September announced a new program that aims to deliver about $3 billion in cost savings by 2030. The program will focus on streamlining workflows with AI-enabled insights and tools.
Cigna now expects 2026 adjusted profit of at least $30.60 per share, 15 cents higher than its previous forecast and above analysts’ expectations of $30.51.
Its quarterly adjusted revenue of $73.79 billion beat analysts’ estimates of $72.72 billion, while adjusted profit of $7.98 per share exceeded market consensus of $7.50.
(Reporting by Kunal Das and Sneha S K in Bengaluru; Editing by Shinjini Ganguli)
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