Cigna lifts profit view after lower medical costs drive Q1 beat

Cigna Group (CI.N) on Friday raised its annual profit forecast after strong growth and lower medical costs at the company’s health insurance business helped it beat estimates in the first quarter.

One of the oldest health insurers in the U.S., Cigna saw its medical cost ratio – or spending on claims as a percentage of premiums – fall to 81.3% from 81.5% thanks to higher premiums and lower COVID-19 costs. Market expectations were pegged at 82.1%, according to four analysts polled by Refinitiv.

Several other health insurers including UnitedHealth (UNH.N) and Humana (HUM.N) also beat profit estimates and raised forecasts this quarter on strength in their government-backed plans and low medical costs.

Still, that has largely failed to allay investor concerns around 2024, when regulatory pressure on insurers and drug middlemen is seen ramping up in light of the U.S. elections. Lower expected reimbursement rates for some government-backed plans are adding to the pressure too.

Cigna cut the midpoint of its 2023 forecast for medical cost ratios by 10 basis points to a range of 81.5% to 82.3%.

This report’s information was first seen on REUTERS; to read more, click this link.