Cigna fourth-quarter profit beats Street on higher premium revenue

Thu Feb 5, 2015 7:41am EST
 
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(Reuters) - Health insurer Cigna Corp (CI.N: Quote) reported a better-than-expected quarterly adjusted profit from operations, driven by increased premium revenue and improved management of medical costs.

Premiums and fees from the company's Global Health Care unit, its largest, rose 9.3 percent to $6.25 million, partly due to an increase in memberships in its commercial business.

Cigna manages insurance plans for large companies and sells health plans on government exchanges created under the U.S. Affordable Care Act, often called Obamacare. It also offers dental and other benefits.

The medical care ratio for Cigna's Global Health Care unit improved to 81.6 percent in the fourth quarter from 82.1 percent a year earlier.

The ratio represents how much an insurer spends on medical claims compared with its income from premiums and is closely watched by investors as it reflects the company's medical spending.

Other large U.S. insurers, such as UnitedHealth Group Inc (UNH.N: Quote), Anthem Inc (ANTM.N: Quote) and Aetna Inc (AET.N: Quote), have also reported medical costs and utilization within expectations.

Cigna also said it expected full-year adjusted income from operations in the range of $2.1 billion-$2.2 billion, or $8.00-$8.40 per share. Analysts were expecting 2015 earnings of $8.17 per share.

The forecast includes acquisition-related expenses of about 40 cents per share, Cigna said.

The company, on Wednesday, said it had chosen Gilead Inc's (GILD.O: Quote) Harvoni as its preferred treatment for hepatitis C over AbbVie Inc's (ABBV.N: Quote) Viekira Pak, after negotiating a discount with Gilead.   Continued...

 
Cigna CEO David Cordani is interviewed at the Reuters Health Summit 2014 in Washington April 1, 2014. REUTERS/Gary Cameron