Cigna Profit Rises As Premium Revenue Grows

Health insurer Cigna Corp said on Thursday second-quarter profit and revenue both rose as it took in more health care premiums and fees from more customers in its commercial business.

Cigna's profit beat analysts' expectations, following a trend this quarter from larger competitors that have already reported, including WellPoint Inc and Aetna Inc.

Much of Cigna's health care business comes from fees it charges large corporations to manage plans for their employees. The company, which also has Medicare and Medicaid customers and sells dental, life, disability insurance, attributed the profit growth to higher revenue and management of expenses and medical costs.

Leerink Partners analyst Ana Gupte said the company topped expectations on strength in its global disability and life business, which brought in 6 cents more per share in profit than Wall Street expected. Its supplemental insurance business contributed 3 cents per share more than estimated, she said.

Cigna, based in Bloomfield, reported higher medical costs as a percentage of total premiums received in certain of its commercial business and in Medicare accounts, Gupte wrote in a research note. Other general costs were better than expected.

Investors sold insurance stocks this week on concerns that medical costs, long at historical lows, might be on the rise.

Cigna reported its net income rose to $573 million, or $2.12 per share, from $505 million, or $1.76 per share, a year earlier.

Excluding investment gains, the company earned $1.96 per share. Analysts, on average, expected $1.84, according to Thomson Reuters I/B/E/S.

Revenue rose 9 percent to $8.7 billion.

Cigna had 13.8 million people in its commercial business, up from 13.6 million a year earlier.

Copyright © 2018, CT Now