Cigna Announces Major C-Suite Restructuring Amid Rising Costs
Cigna, one of the largest insurance companies in the United States, has unveiled a significant reshuffling of its executive leadership team. The move comes as the company grapples with rising costs and aims to streamline operations following the divestiture of its Medicare business.
Executive Appointments and Departures
Brian Evanko, previously serving as Chief Financial Officer and head of Cigna Healthcare, has been promoted to the role of Chief Operating Officer. In this new position, Evanko will oversee both Cigna Healthcare and the health services division Evernorth, consolidating management of the company's two main business segments under a single executive.
Ann Dennison, who joined Cigna last year as deputy CFO after a stint as CFO of Nasdaq, will step up to become the enterprise Chief Financial Officer. Both Evanko and Dennison will report directly to CEO David Cordani.
In a notable departure, Eric Palmer, the current CEO of Evernorth, will be leaving the company at the end of April. Palmer, who has been with Cigna for over 25 years and was the second-highest-paid executive after CEO Cordani, appears to be a casualty of the restructuring efforts.
Financial Performance and Strategic Shifts
The executive reshuffle comes in the wake of Cigna's underwhelming fourth-quarter performance, which fell short of Wall Street expectations. The company reported a 27% year-over-year increase in revenue, reaching $247.1 billion in 2024. However, net income declined by 34% to $3.4 billion, primarily due to unexpected cost growth in plans protecting self-funded employers from high medical spending.
To address these challenges, Cigna is implementing several strategic initiatives:
- Expanding its specialty pharmacy business to boost margins
- Reducing its footprint in Affordable Care Act plans
- Divesting its Medicare business in a $3.7 billion deal expected to close in the first quarter
Industry Analyst Perspectives
JP Morgan analyst Lisa Gill commented on the restructuring, noting that the consolidation of leadership makes sense following the Medicare business divestiture. Gill stated, "With Evanko now sitting atop the leadership structure with broad oversight as COO, we think he will have greater latitude to drive efficient operations across the company moving forward."
Despite the organizational changes, Cigna has reaffirmed its 2025 outlook, projecting adjusted income from operations of at least $29.50 per share. Brian Evanko, speaking at a recent healthcare conference, indicated that the year's performance thus far is tracking in line with the company's expectations.
References
- Cigna reshuffles C-suite amid rising costs
Cigna promoted Brian Evanko to chief operating officer and named a new chief financial officer in his place, while Eric Palmer will be leaving the company as an apparent victim of the restructuring.
Explore Further
What are the potential impacts of Cigna's executive restructuring on its operational efficiency and financial performance?
How might Cigna's divestiture of its Medicare business affect its competitiveness in the insurance market?
What are the qualifications and prior achievements of Brian Evanko and Ann Dennison that led to their new roles at Cigna?
In what ways have other major insurance companies responded to similar challenges related to rising costs and restructuring?
What strategic advantages does Cigna expect to gain by expanding its specialty pharmacy business?