By Sriparna Roy
March 3 (Reuters) - Cigna on Tuesday announced the retirement of long-time CEO David Cordani, surprising analysts, just as the health insurer moves to a new business model.
Cordani will become executive chair on July 1 and be succeeded by insider Brian Evanko, 49, whose three decades at Cigna have taken him to the post of president and chief operating officer, with oversight of its insurance segment Cigna Healthcare and health services unit Evernorth.
Cigna is shifting some customers
to a new model that excludes after-market discounts, known as rebates, a move that it says will squeeze margins over the next two years.
At least two analysts said a leadership change at this time was unexpected. Cigna's shares fell more than 5%.
"Cigna has been a relatively steady part of the MCO industry, and a CEO change does add some uncertainty to a story that has not seen a ton of uncertainty lately, especially relative to peers," said Julie Utterback, analyst at Morningstar.
Last month, Cigna provided a softer forecast for 2026 profit. It reaffirmed the outlook on Tuesday.
EVANKO SEEN AS NATURAL SUCCESSOR AS CIGNA CEO
Cordani, 60, joined Cigna in 1991 and has been CEO since 2009.
Under his leadership, the company bought pharmacy benefits manager Express Scripts for $54 billion in 2018, and sold its Medicare Advantage business to Health Care Service Corporation last year.
Cigna has also reduced its Obamacare business in favour of pharmacy benefits and employer-sponsored healthcare plans.
Analysts said Evanko had been seen as a natural successor to Cordani, who will become the executive chair of the board.
"We would also read this to mean that Cigna is not likely to make any transformational changes, after several near-mergers with Humana over the last decade," said Michael Wiederhorn, an analyst at Oppenheimer.
At 49, Evanko will be among the youngest CEOs in healthcare services, while also one of the most tenured — a rare and attractive combination in today's environment, said Barclays' analyst Andrew Mok.
"This looks to be more of a 'passing of the torch' than a sudden surprise," said Mark Andraos, partner at Regency Wealth Management, which owns just under 19,000 shares in Cigna.
"The reaffirmed guidance tells me that the leadership change likely won't impact their growth targets or continued strategy execution."
(Reporting by Sriparna Roy and Sahil Pandey in Bengaluru; Editing by Shilpi Majumdar and Kevin Liffey)
