Cigna raises annual profit forecast on strength in health services unit

Nov 5 (Reuters) - Cigna CI.N on Thursday raised its annual profit forecast after beating third-quarter results, as the health insurer benefits from gains in its specialty-pharmacy and health-services businesses.

The company has been reducing its exposure to government-backed health insurance plans due to elevated medical costs. It exited Medicare Advantage last year and said it would stop offering Affordable Care Act plans at the end of 2026.

It has now shifted focus to its core traditional employer-sponsored healthcare business and the pharmacy benefits management unit.

Cigna's medical loss ratio, or the percentage of premiums spent on patient care, rose to 85% in the third quarter from 84.8% in the year earlier, due to changes in its US-employer insurance business.

Analysts expected a medical cost ratio of 85.18%, as per data compiled by LSEG.

Evernorth Health Services, which includes Cigna's pharmacy-benefit, specialty-pharmacy and care-services businesses, posted adjusted revenue of $63.77 billion, up about 6% from a year earlier.

Cigna expects its specialty and care-services business, which supports patients with complex conditions including cancer and multiple sclerosis, to account for more than 40% of its total earnings by 2030.

The company in September announced a new program that aims to deliver about $3 billion in cost savings by 2030. The program focuses on modernizing processes and streamlining workflows with AI-enabled insights and tools.

Cigna now expects 2026 adjusted profit of at least $30.60 per share, 15 cents higher than its previous forecast. Analysts expect adjusted profit of $30.51 per share.

Its total quarterly adjusted revenue rose 6% to $73.79 billion from a year earlier, compared with analysts' estimate of $72.72 billion.

On an adjusted basis, Cigna earned $7.98 per share, beating analysts' average estimate of $7.50.