August 4, 2017

Cigna profits soar 59%

HBJ file photo
HBJ file photo
Cigna President and CEO David M. Cordani

Bloomfield health insurer Cigna posted a 59 percent increase in second quarter profits Friday as its commercial business soared.

For the quarter ended June 30, Cigna reported net income of $813 million, or $3.15 a share, compared with $510 million, or $1.97 a share, in the year ago period.

Total revenues increased 4 percent to $10.3 billion from $9.9 billion in the year ago period.

Answering questions in Friday's earnings call, CEO David M. Cordani acknowledged Cigna is riding a growth wave in the industry driven by the strong employer marketplace and implementation of more value-based insurance programs.

"We've been deep into those areas for some time and are seeing the impact of those results ... all of which help you get better engagement and better outcomes," Cordani said.

The company is also positioned with at least $5 billion in cash for possible future mergers and acquisitions, not including a $1.85 billion breakup fee from Anthem for the failed merger, which is in litigation, Cordani and CFO Eric Palmer said.

"There are several growth opportunities which we are quite excited about," Cordani said. "We expect to grow our M&A portfolio in 2018. We did not expand geographies in 2018 because of the situation we were in [with the merger]."

The company grew across all segments, including global healthcare, global supplemental benefits and group disability and life, said Palmer. Part of the reason, Cordani noted, is a commitment to a strategy dubbed "Go deeper, go local and go beyond." That includes personalization of relationships with clients and deployment of social programs designed to promote health and well-being.

Cigna's "One Guide" serves two million customers in the U.S., for example, Cordani said.

The initiative provides guided consultations via phone, mobile app and "Click-to-Chat" to members for choosing their benefits, building a personal health team of doctors and other insurance benefits.

Cigna also is positioning itself for increased enrollments in Medicare Advantage now that sanctions have been lifted against the company.

"We're selling in the marketplace right now and re-enrolling," said Cordani. "We were in the market for July 1 .... We're active today and prepared and ready to roll for 2018."

For 2017, the company expects adjusted earnings per share of $9.75 to $10.05, representing a 20 to 24 percent growth rate over 2016.

Free E-Newsletters

Sign up now for our daily and weekly
e-newsletters! Click Here

Today's Poll Is Hartford an attractive city for Millennials?<>
Most Popular on Facebook
Copyright 2017 New England Business Media