Feb 5 (Reuters) - Cigna CI.N on Thursday forecast 2026 profit and revenue below Wall Street expectations, signaling continued medical cost and margin pressure.
U.S. insurers have faced high costs over the last two years, as they battled increased demand for medical services in government-backed plans.
Cigna, however, relies more on its pharmacy benefits segment and employer-sponsored healthcare plans. Unlike peers, it no longer offers Medicare Advantage plans for adults aged 65 and older and people with disabilities, and has also taken steps to shrink the Obamacare business.
Its health services unit and growth in its specialty pharmacy business helped Cigna to report better-than-expected fourth-quarter results, despite medical costs rising sequentially.
Revenue at the health services unit Evernorth that houses its pharmacy benefit management business rose 20% to $36.3 billion, helped by growth of existing client relationships and new business.
Accredo, its specialty pharmacy business that also handles high-cost drugs, saw increased adoption of biosimilars.
For the quarter, the company reported a medical loss ratio, or the percentage of premiums spent on medical care, of 88%. Analysts expected a ratio of 87.34%, according to data from LSEG.
The higher medical costs were driven by the individual and family plans business, the company said.
Cigna expects 2026 adjusted revenue to be about $280 billion, below estimates of $283.86 billion. It reported 2025 revenue of $274.9 billion.
Industry bellwether UnitedHealth UNH.N and Elevance Health ELV.N have flagged a drop in annual revenue in 2026.
The company sees 2026 adjusted profit per share to be at least $30.25, compared with estimates of $30.36 per share.
It expects the annual medical cost ratio to be between 83.7% and 84.7%. Analysts expect a ratio of 83.78% for 2026.
Quarterly adjusted profit of $8.08 per share surpassed estimates of $7.88.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Anil D'Silva)
((Sneha.SK@thomsonreuters.com;))
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