Cigna results top estimates on strong demand for commercial insurance plans

(Reuters) -Cigna Group second-quarter results beat Wall Street estimates on Thursday, as demand for its commercial insurance plans helped cushion the impact of rising medical costs due to a spike in non-urgent surgeries.

The health insurer joins industry bellwether UnitedHealth Group and Humana in reporting upbeat results.

Health insurers have cautioned of increased medical costs this year after noting a spurt in demand for elective surgeries such as hip and knee replacements which were delayed during the pandemic.

Cigna said costs related to its individual insurance plans were higher compared to last year.

While the company saw its medical cost ratio (MCR) — or spending on claims as a percentage of premiums — rise to 81.2% from 80.7% a year earlier, it was lower than market expectations of 81.95%, according to an average of four analysts polled by Refinitiv.

Premiums during the quarter rose 6% to $11.04 billion for Cigna, one of the oldest U.S. health insurers, beating analysts' average estimate of $10.91 billion.

Excluding one-off items, the company reported adjusted profit from operations of $6.13 per share, compared with estimates of $6.02 per share.

Revenue from Evernorth Health, which includes Cigna's pharmacy benefits management services, rose nearly 10% to $38.21 billion, helped by strength in its specialty pharmacy services.

Cigna provides drugs for cancer and rheumatoid arthritis through its specialty pharmacy unit.

The company maintained its annual profit forecast of at least $24.70 per share, and said it continues to expect medical care ratio between 81.5% and 82.3% for the year.

Overall revenue for the quarter was $48.62 billion compared with analysts' expectations of $47.31 billion.

Shares of the company rose about 1% to $303 in premarket trading.

(Reporting by Bhanvi Satija in BengaluruEditing by Vinay Dwivedi)