Cigna Group has announced a strong financial turnaround, reporting a profit of $1.3 billion for the first quarter of 2025. This marks a significant improvement from a loss of $277 million during the same period last year. The company, based in Bloomfield, Connecticut, attributes this success to its Evernorth division, which has been performing well, and its decision to move away from costly Medicare Advantage operations.
Earnings per share for the quarter reached $4.85, a notable increase compared to the previous year’s loss of 97 cents per share. Adjusted earnings were even better, coming in at $6.74 per share, surpassing what analysts had predicted. Additionally, Cigna raised its full-year earnings forecast to at least $29.60 per share, up by 10 cents from earlier estimates. Revenue for the quarter rose by 14%, reaching $65.5 billion, largely driven by growth in the Evernorth Health Services unit, which includes Express Scripts, a major pharmacy benefit manager.
Investors welcomed these results as they were still concerned about rising medical costs, especially after UnitedHealth Group’s recent forecast revision. Cigna’s positive report helped ease fears about potential issues across the insurance sector.
Cigna’s medical cost ratio, which indicates how much of its premium income is spent on care, was 82.2% for the quarter. Although this figure is higher than the 79.9% reported a year ago, it was better than some analysts had expected. The increase is attributed to higher stop-loss medical costs and the lingering effects of the Medicare Advantage operations that the company has divested.
In March, Cigna completed the sale of its Medicare businesses to Health Care Service Corporation for $3.3 billion. This sale included Medicare Advantage, Medicare Part D, supplemental benefits, and a medical services administration business. The decision to exit the Medicare market reflects a strategic shift for Cigna, which had previously expanded aggressively into this area. Rising costs and stricter regulations had begun to squeeze margins, prompting Cigna to reassess its position.
The company had already started reducing its Medicare Advantage presence in 2024, affecting around 5,400 members, mostly in Florida. This move aligns with similar strategies from competitors like CVS Health and Humana, who are also reevaluating their Medicare approaches due to challenging economic conditions.
With the Medicare business now off its books, Cigna is focusing on its commercial health insurance plans and the Evernorth division, which has become essential to its profitability. The company noted strong performance in specialty pharmacy sales, particularly with increasing demand for biosimilars to top-selling drugs like Humira.
At the end of the quarter, Cigna reported having 18 million medical customers, a decrease of 6% from December 2024, primarily due to the divestiture of its Medicare-related business. Cigna’s CEO, David M. Cordani, emphasized that the strong first-quarter results and improved outlook reflect the strength of the company’s growth platforms in a changing environment.
Overall, Cigna’s latest financial results highlight its shift towards more stable revenue sources, moving away from the unpredictable Medicare Advantage market and focusing on employer-sponsored insurance and expanding health services.