(Reuters) – The Cigna Group raised its full-year profit forecast on Thursday, banking on strength in its pharmacy benefit unit and lower-than-expected insurance claims.
Health insurers had warned of a jump in medical costs earlier this year as older adults return to hospitals for elective surgeries that were delayed during the pandemic.
However, Cigna joined rival health insurers UnitedHealth and Elevance in allaying some of those concerns by lifting their annual adjusted profit forecasts.
Cigna also reported third-quarter adjusted earnings that beat estimates.
Its benefit-expense ratio, or the percentage of payout on claims compared to its premiums was 80.5% in the third quarter, lower than analysts’ estimate of 81.67%, according LSEG data.
Cigna’s Evernorth Health, which includes the pharmacy benefits management (PBM) unit, reported an 8% jump in quarterly revenue to $38.6 billion on strength in its specialty pharmacy services. The unit provides drugs for cancer and rheumatoid arthritis.
PBMs act as intermediaries between drugmakers and insurers. They get after-market discounts from drugmakers to add treatments to the lists they recommend to insurers and companies offering coverage for employees.
Cigna expects its annual profit to be at least $24.75 per share, compared with its previous forecast of at least $24.70 per share.
Excluding one-off items, the company reported a profit of $6.77 per share in the quarter, beating analysts’ average estimate of $6.67 per share.
(This story has been refiled to correct the company’s name to Cigna Group, from Cigna Corp, in paragraph 1)
(Reporting by Khushi Mandowara in Bengaluru; Editing by Saumyadeb Chakrabarty)
