Cigna Reports Q4 Earnings Miss Amid Rising Medical Costs

The Cigna Group, a major player in the health insurance industry, has released its financial results for the fourth quarter of 2024, revealing a significant earnings miss due to elevated medical costs. This development highlights ongoing challenges faced by insurers in managing healthcare expenses.

Q4 Financial Performance

Cigna reported a profit of $1.4 billion for Q4 2024, falling short of Wall Street expectations. The company's full-year profits for 2024 stood at $3.4 billion, a substantial decrease from the $5.2 billion reported in 2023. Despite the earnings miss, Cigna beat revenue projections, reporting $65.6 billion in Q4 revenue, up from $51.1 billion in the same period of 2023.

The insurer's medical loss ratio (MLR) for Q4 2024 was 87.9%, a significant increase from 82.2% in the prior-year quarter. For the full year 2024, the MLR was 83.2%, higher than the 81.3% reported in 2023. Cigna attributed this spike primarily to higher stop loss medical costs.

Evernorth Division Performance

While the core insurance business faced challenges, Cigna's Evernorth division emerged as a bright spot. This unit, which includes pharmacy benefit manager Express Scripts, Accredo specialty pharmacy, and MDLive telehealth services, saw substantial growth. Evernorth's revenues reached $53.7 billion in Q4, up from $40.5 billion in the prior-year quarter. For the full year, the division generated $202.5 billion in revenue.

Strategic Response and Outlook

Cigna CEO David Cordani addressed the earnings miss, stating, "While higher medical costs in our stop loss product impacted fourth quarter earnings, we are taking corrective actions to address these near-term pressures and we are simultaneously taking steps to further advance our long-term growth strategy."

Looking ahead, Cigna projects at least $252 billion in revenue for 2025 and forecasts a full-year MLR between 83.2% and 84.2%. The company reported 118.3 million pharmacy customers and 19.1 million medical benefit customers as of December 31, 2024.

As the healthcare landscape continues to evolve, Cigna emphasized its commitment to building a sustainable model for healthcare by focusing on transparency, support, and value for patients and clients.