Health insurance company Cigna has increased its annual earnings projections following a first quarter that exceeded Wall Street expectations, the company announced Thursday. The improved outlook stems from robust performance in the company’s health services division and medical expenses that came in below anticipated levels.
Cigna has positioned itself differently from many competitors by exiting the Medicare Advantage market that serves seniors and disabled individuals, while also reducing its presence in Affordable Care Act marketplace plans. The insurer now focuses primarily on pharmacy benefit services and health plans provided through employers.
The company is transitioning some clients to a new pricing structure that eliminates after-market price reductions called rebates, though executives acknowledge this change will compress profit margins during the next two years.
Medical expenses as a percentage of premium income reached 79.8% during the quarter, falling short of the 81.56% that Wall Street analysts had predicted based on LSEG data.
Company officials attributed this favorable metric partly to their agreement with Health Care Service Corp involving the sale of Cigna’s Medicare operations.
Revenue at Evernorth, the company’s health services division, climbed almost 9% to reach $58.44 billion for the three-month period.
Cigna has revised its 2026 earnings projection upward to $30.35 per share, an increase from the previous forecast of at least $30.25 per share. This also surpasses the $30.33 per share that analysts had estimated.
The company reported adjusted quarterly earnings of $7.79 per share, beating analyst expectations of $7.61 per share.
