Health insurer Cigna boosts forecast as COVID costs recede

Reuters

Published May 06, 2022 06:39AM ET

Updated May 06, 2022 10:55AM ET

By Mrinalika Roy

(Reuters) -Health insurer Cigna Corp (NYSE:CI) raised its annual adjusted profit forecast on Friday, following a decline in COVID-related costs and no sign of pent-up demand for medical procedures that were delayed due to the pandemic.

Shares of the company shot up nearly 5% to $263.7 in early trading, after it also reported first-quarter profit above estimates.

Health insurers came under pressure from volatile medical costs during the pandemic, but some of that was offset by people postponing non-urgent medical procedures.

"We are not seeing any acuity spikes or pent-up demand emerge for things like blood screenings, preventive exams, mammograms, colonoscopy," Chief Financial Officer Brian Evanko said during a post-earnings call.

"Non-COVID shaping up very much in line with what we had been expecting this year."

A drop in COVID testing and treatment costs also helped Cigna report a lower-than-expected medical care ratio (MCR), the amount spent on medical claims versus income from premiums.

Total medical customers of its health plans rose to 17.8 million in the quarter, boosted by growth in U.S. commercial membership.

"Cigna turned in better-than-anticipated operating results for Q1 that allowed management to boost its 2022 outlook a bit, primarily due to strength in its medical insurance operations where its commercial operations really shined for the first time since the pandemic began," said Morningstar analyst Julie Utterback.

The company moderately raised its forecast for 2022 adjusted profit from operations to at least $22.60 per share, from a minimum of $22.40 per share expected earlier.