(Reuters) -Cigna Group beat Wall Street estimates for third-quarter profit on Thursday, driven by strength in the company's health services unit Evernorth that houses its pharmacy benefit management business.
The health insurer also reaffirmed its annual adjusted profit forecast of at least $29.60 per share. Analysts on average expected $29.63 per share, according to LSEG data.
Unlike other insurers that have been battling high costs in government-backed plans, Cigna has been able to shield itself as the company relies more on the pharmacy benefits segment, Express Scripts, and employer-sponsored healthcare plans.
Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health-plan clients.
Quarterly adjusted revenue at its Evernorth health services segmeny rose about 15% to $60.39 billion, helped by growth of existing clients and strong sales in its specialty pharmacy business, Accredo, which handles high-cost drugs.
Earlier this week Cigna said it will eliminate prescription drug rebates in its own commercial health plans in 2027 and offer up-front discounts at its pharmacies, a shift it said would lower costs for patients. In 2028, clients of its Express Scripts can also elect for this benefit.
Cigna's medical care ratio, the percentage of premiums spent on medical care, was 84.8% in the quarter, higher than 82.8% a year ago. This compares with analysts' estimates of 84.17%, per LSEG data.
The higher costs were partly tied to costs in the company's "stop-loss" insurance products meant to protect employers from catastrophic expenses, an issue it has previously warned about.
Cigna said the higher stop-loss medical costs were consistent with its expectations and prior commentary.
On an adjusted basis, Cigna earned a quarterly profit per share of $7.83, beating estimates of $7.65 per share.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Devika Syamnaath)
