Cigna raises forecast after quarterly profit beats on lower costs

[August 04, 2022]    (Reuters) -Cigna Corp joined peers in raising its annual profit forecast after its quarterly earnings beat estimates on Thursday, as a slow recovery in non-urgent medical procedures helps insurers rein in medical expenses.

A screen displays the logo for Cigna Corp. on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 16, 2019. REUTERS/Brendan McDermid/File Photo

Health insurers have seen medical costs fluctuate through the pandemic, with lower spending on elective procedures softening the blow from higher claims related to COVID-19 testing and treatment.

UnitedHealth Group and Elevance Health, formerly known as Anthem Inc, raised annual profit forecasts in July, while CVS Health lifted its earnings forecast on Wednesday, buoyed by a strong performance in its health insurance and pharmacy services units.

Cigna said lower direct COVID costs and improved revenue from government-backed health plans helped bring down its medical care ratio (MCR), or the amount spent on medical claims versus the income from premiums, to 80.7% from 84.4% a year earlier.

The Bloomfield, Connecticut-based insurer forecast 2022 MCR between 81.5% and 82.5%, compared with its prior forecast of 82% to 83.5%.

Cigna now expects full-year adjusted earnings of at least $22.90 per share, compared with its previous forecast of $22.60 per share.

Excluding special items, Cigna's income from operations was $6.22 per share, above analysts' average estimate of $5.48, according to Refinitiv IBES data.

(Reporting by Bhanvi Satija and Mrinalika Roy in Bengaluru; Editing by Vinay Dwivedi)

 

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