The Cigna Group Reports Strong Second Quarter 2024 Results

Global health company The Cigna Group (NYSE: CI) today reported strong second quarter 2024 results reflecting broad-based revenue and earnings growth across its businesses.

“Our second quarter results underscore the strength of our diversified portfolio. We continue to deliver innovative solutions to meet the evolving needs of those we serve,” said David M. Cordani, chairman and CEO of The Cigna Group. “We remain disciplined in our approach to executing our strategy, enabling us to consistently deliver value and sustain our growth in a dynamic environment.”

Shareholders’ net income for second quarter 2024 was $1.5 billion, or $5.45 per share, compared with $1.5 billion, or $4.92 per share, for second quarter 2023.

The Cigna Group’s adjusted income from operations¹ for second quarter 2024 was $1.9 billion, or $6.72 per share, compared with $1.8 billion, or $6.13 per share, for second quarter 2023, reflecting strong contributions from both Evernorth Health Services and Cigna Healthcare.

A reconciliation of shareholders’ net income to adjusted income from operations¹ is provided on the following page and on Exhibit 1 of this earnings release.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and reconciliations of total revenues to adjusted revenues³ and shareholders’ net income (loss) to adjusted income from operations¹:

• Total revenues for second quarter 2024 increased 25% from second quarter 2023, primarily driven by significant growth in Evernorth Health Services, reflecting large client wins.
  
  
• Adjusted income from operations¹ for second quarter 2024 increased 5% from second quarter 2023, reflecting strong contributions from Evernorth Health Services and Cigna Healthcare.
  
  
• The SG&A expense ratio⁴ and adjusted SG&A expense ratio⁴ were 6.1% and 6.0%, respectively, for second quarter 2024, compared to 7.1% for both ratios in second quarter 2023, reflecting business mix shift and continued operating efficiency.
  
  
• The debt-to-capitalization ratio was 43.6% at June 30, 2024 compared to 44.3% at March 31, 2024.
  
  
• Year to date through July 31, 2024, the company purchased 14.7 million shares of common stock for approximately $5.0 billion. This includes the purchase of 9.3 million shares of common stock for $3.2 billion in accordance with the previously disclosed Accelerated Share Repurchase (ASR) Agreements.

CUSTOMER RELATIONSHIPS

The following table summarizes The Cigna Group’s medical customers and overall customer relationships:

• Total customer relationships⁵ at June 30, 2024 increased 13% from December 31, 2023 to 186.2 million.
  
  
• Total pharmacy customers⁵ at June 30, 2024 increased 24% from December 31, 2023 to 122.5 million due to new sales and the continued expansion of relationships.
  
  
• Total medical customers⁵ at June 30, 2024 were 19.0 million, primarily reflecting a year-to-date decrease in Individual and Family Plans customers, driven by targeted pricing actions in certain geographies.
  
  
• Behavioral Care customers⁵ at June 30, 2024 were 23.8 million. The year-over-year decrease was primarily due to known non-renewal of supplemental behavioral coverage contracts, which were insignificant to total revenues and adjusted income from operations.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income from operations¹ to shareholders’ net income.

Evernorth Health Services

This segment includes the Pharmacy Benefit Services and the Specialty and Care Services operating segments, which partner with health plans, employers, governmental organizations and health care providers to solve challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

Pharmacy Benefit Services drives high-quality, cost-effective pharmacy care through various services such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care delivery and management solutions.

• Evernorth Health Services second quarter 2024 adjusted revenues³ and adjusted income from operations, pre-tax¹, increased 30% and 7%, respectively, relative to second quarter 2023.
  
  
• For Pharmacy Benefit Services second quarter 2024 relative to second quarter 2023:
  • Adjusted revenues³ increased 41%, reflecting client wins and organic growth.
  • Adjusted income from operations, pre-tax¹, increased 3%, reflecting continued affordability improvements, partially offset by planned investments to support new and existing client growth.
    
    
• For Specialty and Care Services second quarter 2024 relative to second quarter 2023:
  • Adjusted revenues³ increased 18%, reflecting client wins and organic growth in specialty businesses.
  • Adjusted income from operations, pre-tax¹, increased 12%, reflecting organic growth in specialty businesses and clinical care services, partially offset by increased investments to support business growth and the continued advancement of our digital capabilities and solutions.

Cigna Healthcare

This segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides commercial medical plans and specialty benefits and solutions for insured and self-insured clients, Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans. International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

• Second quarter 2024 adjusted revenues^3,7 increased 3% relative to second quarter 2023, reflecting premium rate increases to cover expected increases in underlying medical costs, partially offset by business mix.
  
  
• Second quarter 2024 adjusted income from operations, pre-tax¹, increased 3% relative to second quarter 2023, primarily driven by continued operating efficiency and higher net investment income, partially offset by a higher MCR⁴.
  
  
• The Cigna Healthcare MCR⁴ was 82.3% for second quarter 2024 and includes approximately $50 million of unfavorable prior year revenue impacts, or 40 bps, primarily related to Medicare Advantage risk adjustment. The second quarter 2024 MCR⁴ compares to 81.2% for second quarter 2023, reflecting business mix and the aforementioned prior year revenue adjustments, partially offset by effective pricing execution and affordability initiatives.
  
  
• Cigna Healthcare net medical costs payable⁸ was $5.04 billion at June 30, 2024, $5.66 billion at March 31, 2024, and $5.12 billion at June 30, 2023. The current net medical costs payable reflects more normalized levels after first quarter was elevated due to claims submission and payment process disruptions related to a third-party cyber incident. Favorable prior year reserve development on a gross pre-tax basis was $284 million and $202 million for the six months ended June 30, 2024 and 2023, respectively.

Corporate and Other Operations

Corporate reflects interest expense, amounts not allocated to operating segments and includes intersegment eliminations. Additionally, this discussion includes items reported in Other Operations, which is comprised of Corporate Owned Life Insurance (“COLI”), the Company’s run-off operations and other non-strategic businesses.

• Second quarter 2024 adjusted loss from operations, pre-tax¹, was $451 million compared to $394 million for second quarter 2023, primarily reflecting the impact of higher interest expense.

2024 OUTLOOK²

The Cigna Group’s outlook² for full year 2024 adjusted revenues^2,3 is at least $235.0 billion. The Cigna Group’s outlook² for full year 2024 consolidated adjusted income from operations^1,2 is at least $8.065 billion, or at least $28.40 per share². Additionally, this outlook includes the impact of expected future share repurchases and anticipated 2024 dividends.

The foregoing statements represent the Company’s current estimates of The Cigna Group’s 2024 consolidated and segment adjusted income from operations^1,2 and other key metrics as of the date of this release.  Actual results may differ materially depending on a number of factors.  Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release.  Management does not assume any obligation to update these estimates.

About The Cigna Group

The Cigna Group (NYSE: CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Evernorth Health Services, Cigna Healthcare, or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 markets and jurisdictions, and has approximately 186 million customer relationships around the world. Learn more at thecignagroup.com.