Cigna Delivers Strong 2018 Results as it Completes Express Scripts Transaction; Company Positioned for Significant Growth

February 1, 2019

BLOOMFIELD, Conn.--(BUSINESS WIRE)--Feb 1, 2019--Global health service company Cigna Corporation (NYSE: CI) today reported strong 2018 results with growth across each of the Company’s diversified growth platforms.

“Cigna completed an exceptionally strong 2018, with revenue, customer, and earnings growth, driven by continued innovation across the business,” said David M. Cordani, President and Chief Executive Officer. “We enter 2019 further strengthened by our combination with Express Scripts and positioned to deliver outstanding growth fueled by accelerated innovation that will improve whole person health and affordability for customers and clients.”

Total revenues for 2018 were $49 billion. Adjusted revenues 1 were $48 billion, an increase of 15% over 2017, driven by continued growth in Cigna’s targeted customer segments.

Shareholders’ net income for 2018 was $2.6 billion, or $10.54 per share, compared with $2.2 billion, or $8.77 per share, for 2017.

Cigna’s adjusted income from operations 2 for 2018 was $3.6 billion, or $14.22 per share, compared with $2.7 billion, or $10.46 per share, for 2017. This reflects increased earnings contributions from each of our segments.

Reconciliations of shareholders’ net income to adjusted income from operations 2 are provided on the following page, and on Exhibit 1 of this earnings release.


The following table includes highlights of results and reconciliations of adjusted revenues 1 to total revenues and adjusted income from operations 2 to shareholders’ net income:

In 2018, the Company repurchased 1.6 million shares of stock for $329 million. In January 2019, the Company repurchased 1.1 million shares of common stock for approximately $209 million. The SG&A expense ratio 5 of 23.2% for full year 2018 and 21.7% for fourth quarter 2018 reflect the return of the health insurance tax, business mix changes and continued investments in strategic initiatives.


The following table summarizes our medical customers and overall customer relationships:

Customer Relationships (in thousands):

The total medical customer base 6 at the end of 2018 was 17 million, an organic increase of 584,000 customers during the year, driven by strong growth across our Commercial market segments. Pharmacy 6 and Medicare Part D customer growth in the fourth quarter 2018 primarily reflects additional customers gained through the completion of the Express Scripts combination on December 20, 2018.


See Exhibit 1 for a reconciliation of adjusted income (loss) from operations 2 to shareholders’ net income.

Integrated Medical

This segment includes Cigna’s U.S. Commercial and Government businesses that provide comprehensive medical solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services to insured and self-insured customers. Government solutions include Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, Medicaid plans, and individual health insurance coverage both on and off the public exchanges.

Integrated Medical delivered strong results in 2018, led by organic growth and strong margins in our Commercial and Government businesses. Fourth quarter 2018 adjusted revenues increased 13% relative to fourth quarter 2017, driven by Commercial customer growth and expansion of specialty relationships, as well as premium increases consistent with underlying cost trends. Fourth quarter 2018 adjusted income from operations, pre-tax 2 and adjusted margin, pre-tax 8 reflect strong medical and specialty contributions, continued effective medical cost management, and seasonally higher medical costs. Adjusted income from operations, pre-tax 2 for full year 2018, fourth quarter 2018, and full year 2017 included favorable net prior year reserve development on a pre-tax basis of $97 million, $8 million, and $148 million, respectively. The medical care ratio 5 (“MCR”) of 78.9% for full year 2018 and 80.9% for fourth quarter 2018 reflect strong performance and execution in our employer and government businesses, continued favorability in individual, seasonally higher fourth quarter medical costs, and the pricing effect of the resumption of the health insurance tax. Integrated Medical net medical costs payable 9 was approximately $2.43 billion at December 31, 2018, $2.48 billion at September 30, 2018 and $2.16 billion at December 31, 2017.

Health Services

This segment includes a broad range of pharmacy services, including benefits management, specialty pharmacy services, clinical solutions, home delivery, and certain medical management services.

Health Services results in the fourth quarter 2018 and full year 2018 reflect eleven days of contributions from the Express Scripts business, following completion of the combination on December 20, 2018. Health Services delivered solid results in fourth quarter 2018 reflecting contributions from Cigna’s mail order pharmacy operations in support of our integrated value proposition and from Express Scripts following completion of the combination.

International Markets

This segment includes supplemental health, life and accident insurance products and health care coverage in our international markets as well as health care benefits for globally mobile employees of multinational organizations.

Financial Results (dollars in millions, policies and customers in thousands):

International Markets delivered strong results in 2018, reflecting the value of our differentiated health and life solutions for individual consumers provided through diversified distribution channels as well as strong global health benefits contributions. Fourth quarter 2018 adjusted revenues 7 grew 7% over fourth quarter 2017, reflecting continued business growth. Fourth quarter 2018 adjusted income from operations, pre-tax 2 and adjusted margin, pre-tax 8 reflect business growth, seasonally higher claims expenses, as well as strategic investments for long-term growth.

Group Disability and Other Operations

This segment includes Cigna’s Group Disability and Life business which offers group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and services. Additionally, this segment includes Corporate Owned Life Insurance (“COLI”) and the Company’s run-off operations.

Financial Results (dollars in millions):

Fourth quarter 2018 adjusted income from operations, pre-tax 2 and adjusted margin, pre-tax 8 reflect strong life results offset by unfavorable disability claims.


Corporate reflects interest expense as well as amounts not allocated to operating segments and includes intersegment eliminations.

The fourth quarter 2018 adjusted loss from operations, pre-tax 2 increased as a result of higher interest expense following completion of our combination with Express Scripts on December 20, 2018.


Cigna’s outlook for full year 2019 consolidated adjusted income from operations 2,3,4 is in the range of $6.2 billion to $6.4 billion, or $16.00 to $16.50 per share. Cigna’s outlook excludes the impact of additional prior year reserve development of medical costs and potential effects of any future share repurchase 4.

The foregoing statements represent the Company’s current estimates of Cigna’s 2019 consolidated and segment adjusted income from operations 2,3,4 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.

This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna’s website in the Investor Relations section ( http://www.cigna.com/aboutcigna/investors ). Management will be hosting a conference call to review fourth quarter 2018 results and discuss full year 2019 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of Cigna’s website located at https://www.cigna.com/aboutcigna/investors/events/index.page.

The call-in numbers for the conference call are as follows:

It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.

About Cigna

Cigna Corporation (NYSE: CI) is a global health service company dedicated to improving the health, well-being and peace of mind for those we serve. Cigna delivers choice, predictability, affordability and quality care through integrated capabilities and connected, personalized solutions that advance whole person health. All products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company, Connecticut General Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of New York, Express Scripts companies or their affiliates. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, and other related products including group life, accident and disability insurance.

Cigna maintains sales capability in over 30 countries and jurisdictions, and has more than 160 million customer relationships throughout the world. To learn more about Cigna ®, including links to follow us on Facebook or Twitter, visit www.cigna.com.


This press release, and oral statements made with respect to information contained in this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna’s current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning our projected adjusted income (loss) from operations outlook for 2019, on both a consolidated and segment basis; projected adjusted revenue outlook for 2019; projected global medical customer growth over year end 2018; projected growth beyond 2019; statements concerning our long-term projected adjusted income (loss) from operations outlook; projected medical care and SG&A expense ratios and medical cost trends; projected adjusted pharmacy claims; our projected consolidated adjusted tax rate; future financial or operating performance, including our ability to deliver personalized and innovative solutions for our customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; the merger (the “Merger”) with Express Scripts Holding Company (“Express Scripts”) and other statements regarding Cigna’s future beliefs, expectations, plans, intentions, financial condition or performance. You may identify forward-looking statements by the use of words such as “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,” “will” or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage medical costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers; the impact of modifications to our operations and processes; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions, including with respect to the Merger; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; the possibility that the anticipated benefits (including anticipated synergies) from the Merger cannot be realized in full, or at all or may take longer to realize than expected; problems regarding the successful integration of the businesses of Express Scripts and Cigna; unexpected costs regarding the Merger; the ability to retain key personnel; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K and subsequent reports on Forms 10-Q and 8-K available on the Investor Relations section of www.cigna.com as well as on Express Scripts’ most recent report on Form 10-K and subsequent reports on Forms 10-Q and 8-K available on the Investor Relations section of www.express-scripts.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

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Will McDowell




Ellie Polack





SOURCE: Cigna Corporation

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PUB: 02/01/2019 06:00 AM/DISC: 02/01/2019 06:01 AM


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