BLOOMFIELD, Conn., July 30, 2020 /PRNewswire/ -- 

• Total revenues in the second quarter were $39.3 billion. Adjusted revenues¹ were $39.2 billion.
• Shareholders' net income for second quarter was $1.8 billion, or $4.73 per share
• Adjusted income from operations² for the second quarter was $2.2 billion, or $5.81 per share
• Adjusted income from operations^2,3 is projected to be in the range of $18.00 to $18.60 per share in 2020³

Global health service company Cigna Corporation (NYSE: CI) continues to expand stakeholder and community support and today reported second quarter 2020 performance.

"Cigna's mission to improve the health, well-being and peace of mind of those we serve continues to guide us as we remain relentlessly focused on supporting the needs of our customers, clients, and communities," said David M. Cordani, President and Chief Executive Officer.  "Our stakeholders are facing unprecedented challenges from the pandemic, uncertainty of a disrupted economy, and pain of racial tensions and inequality.  We are proud of the actions we have taken to provide innovative programs and services and expanded financial support, all while delivering sustained, attractive financial performance and generating substantial cash flows that fuel our offerings for the benefit of all we serve."

Total revenues for second quarter 2020 were $39.3 billion.  Adjusted revenues¹ were $39.2 billion and reflect strong contributions from each of Cigna's ongoing businesses.  

Shareholders' net income for second quarter 2020 was $1.8 billion, or $4.73 per share, compared with $1.4 billion, or $3.70 per share, for second quarter 2019.

Cigna's adjusted income from operations² for second quarter 2020 was $2.2 billion, or $5.81 per share, compared with $1.6 billion, or $4.30 per share, for second quarter 2019 reflecting the impact of deferred medical utilization due to the COVID-19 pandemic as well as ongoing focused execution across our businesses.

Reconciliations of total revenues to adjusted revenues¹ and of shareholders' net income to adjusted income from operations² are provided on the following page, and on Exhibit 1 of this earnings release.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and reconciliations of total revenues to adjusted revenues¹ and shareholders' net income to adjusted income from operations²:

• Cigna's second quarter results reflect revenue and earnings growth due to strong fundamental performance and lower medical costs from deferred care related to the COVID-19 pandemic.
• Year to date through July 29, 2020, the Company repurchased 8.3 million shares of common stock for approximately $1.5 billion.
• The debt to capitalization ratio decreased to 43.5% at June 30, 2020 from 45.2% at December 31, 2019.
• The SG&A expense ratio⁴ was 8.4% for second quarter 2020, a decrease from 9.0% for second quarter 2019, driven by significant revenue growth and continued expense efficiency.

CUSTOMER RELATIONSHIPS

The following table summarizes Cigna's medical customers and overall customer relationships:

• The pharmacy customer base⁵ at second quarter 2020 grew to 84.9 million, an organic increase of 9.0 million customers year to date, driven by strong new health plan sales.
• The total medical customer base⁵ at second quarter 2020 was 17.1 million, a decrease of 62,000 customers year to date, driven by a decline in National Accounts, partially offset by growth in Medicare Advantage and the Select and International Markets segments.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income (loss) from operations² to shareholders' net income. 

Health Services

This segment includes a broad range of services, including benefits management, specialty pharmacy services, clinical solutions, home delivery, and health management services. 

• Second quarter 2020 adjusted revenues¹ increased 22% relative to second quarter 2019 driven by the insourcing of Integrated Medical pharmacy volumes and strong organic growth, including continued growth in specialty pharmacy services, partially offset by reduced retail script volumes due to the COVID-19 pandemic.
• Second quarter adjusted income from operations, pre-tax² increased 7% relative to second quarter 2019, reflecting customer growth, higher adjusted pharmacy scripts volumes, benefits from the effective management of the supply chain, and continued strong performance in specialty pharmacy services, partially offset by an increase in operating expenses to support growth.
• Health Services fulfilled 364 million adjusted pharmacy scripts⁸ in second quarter 2020, an increase of 24% over second quarter 2019 driven by the insourcing of Integrated Medical pharmacy volumes and strong organic growth, partially offset by reduced retail script volumes.

Integrated Medical

This segment includes Cigna's U.S. Commercial and Government businesses that provide comprehensive medical solutions to clients and customers.  U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services to insured and self-insured customers.  Government solutions include Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, Medicaid plans, and individual health insurance coverage both on and off the public exchanges.

• Second quarter 2020 adjusted revenues¹ grew 3% over second quarter 2019, reflecting customer growth in Medicare Advantage and in the Select segment, as well as premium increases, partially offset by premium relief programs for clients that were delivered in response to the COVID-19 pandemic. The sequential decline in adjusted revenues¹ was primarily due to premium relief programs for clients, lower net investment income, and a modest decline in medical customers.
• Second quarter 2020 adjusted income from operations, pre-tax² and adjusted margin, pre-tax⁷ reflect significantly lower medical utilization in both the Commercial and Government segments compared to historic patterns, as individuals deferred care due to the COVID-19 pandemic, partially offset by premium relief programs for clients and cost share waivers for customers.
• The medical care ratio⁴ ("MCR") of 70.5% for second quarter 2020 reflects significantly lower medical utilization in both the Commercial and Government segments compared to historic patterns, as individuals deferred care due to the COVID-19 pandemic, partially offset by premium relief programs for clients and cost share waivers for customers.
• Integrated Medical net medical costs payable⁹ was $2.80 billion at June 30, 2020, $2.64 billion at June 30, 2019, and $2.59 billion at December 31, 2019. Year to date, favorable prior year reserve development on a gross pre-tax basis was $130 million and $149 million through second quarter 2020 and 2019, respectively.

International Markets

This segment includes supplemental health, life and accident insurance products and health care coverage in Cigna's international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

• Second quarter 2020 adjusted revenues^1,6 grew 3% over second quarter 2019, reflecting continued business growth, partially offset by adverse foreign currency movement.
• Second quarter 2020 adjusted income from operations, pre-tax² and adjusted margin, pre-tax⁷ reflect lower claim levels driven by the COVID-19 pandemic, continued business growth and operational efficiency.

Group Disability and Other Operations

This segment includes Cigna's Group Disability and Life business which offers group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and services.  Additionally, this segment includes Corporate Owned Life Insurance ("COLI") and the Company's run-off operations.

• Second quarter 2020 adjusted income from operations, pre-tax² and adjusted margin, pre-tax⁷ reflect elevated claims in Cigna's Life business primarily related to the COVID-19 pandemic, partially offset by favorable performance within the Disability business.
• On December 18, 2019, Cigna announced a definitive agreement whereby New York Life will acquire Cigna's Group Disability and Life business for $6.3 billion. Cigna expects the transaction to close in the third quarter of 2020, subject to applicable regulatory approvals and other customary closing conditions.

Corporate

Corporate reflects interest expense, as well as amounts not allocated to operating segments and includes intersegment eliminations. 

• Second quarter 2020 adjusted loss from operations, pre-tax² decreased relative to second quarter 2019 as a result of lower interest expense.

COVID-19 Response

From the onset of the COVID-19 pandemic, Cigna has focused on delivering peace of mind for the people and businesses we serve, and our employees and their families. We've taken bold actions to drive affordability, remove uncertainty, and make health care easier. To date, these actions include:

Making Health Care Affordable

• Waived customer out-of-pocket costs for COVID-19 related visits, testing and treatment delivered by any in-network provider anywhere – whether at an office, an urgent care center, emergency room or through virtual care.¹⁰
• Protecting customers from surprise bills by out-of-network providers through the Customer Protection Program.
• Customers can utilize free standard shipping for home delivery of maintenance medications.
• Helping people temporarily without coverage access prescription savings through Parachute Rx.
• Employers can provide tax-free financial assistance to employees for qualified disaster relief payments, such as medical payments, groceries, child care, and wellness services with the Cigna Care Card.
• Expanding financial assistance to Cigna group dental clients by issuing one-month premium credits.
• Offering financial relief to clients through its Guaranteed Cost Client Relief Program.

Making Health Care Predictable

• Helping customers get COVID-19 care in the safety of their home from Medocity.
• Protecting prescription medication supply through quantity limits as needed.
• 24/7 customer access to pharmacists.
• Waived prior authorizations for patient transfers, emergency department visits and home health care services.
• Customers can utilize virtual care for non-COVID-19 issues at the standard in-office benefit.
• Acute and advanced illness care offered at home.

Making Health Care Simple

• Encouraged use of virtual care, and have seen 132K+ visits through telehealth partners MDLIVE and Amwell.
• Cigna Dental customers can utilize Cigna Dental Virtual Care powered by The TeleDentists.
• Buoy Health (U.S.) and Infermedica (international) tools provide COVID-19 symptom checkers. To date, 100K+ customers have used Buoy.
• Digital mental health care tools available include Happify, iPrevail and Talkspace, and SilverCloud Health.
• Expanded Employee Assistance Programs for customers and households, and have seen a significant increase in consultations.

Supporting Communities

• Cigna and the Cigna Foundation¹¹launched the Brave of Heart Fund with a $25M grant to provide financial assistance to survivors of frontline U.S. workers who gave their lives in COVID-19 fight. The Fund was created in partnership with the New York Life Foundation. Cigna will also provide emotional support services at no cost.
• Providing free on-demand supportive resources for customers and the general public, such as online articles, podcasts, and webinars.
• 24/7 free mental health support line for the public.
• Cigna has not requested or retained any proceeds under the CARES Act.

Supporting Our Workforce

• In less than one month's time, enabled nearly 100% of employees who could work from home to do so, globally.
• Lifted restriction on paid time off use before accrual.
• Employees have 10 paid Emergency Time Off days for COVID-19 related absences.
• 20% pay premium for U.S. worksite-essential employees.
• Enhanced employee recognition program.
• Introduced the Cigna COVID-19 Employee Assistance Fund to help offset extraordinary financial hardships.
• Launched Employees Helping Employees: Cloth Face Coverings campaign for employees to make masks for worksite essential coworkers.
• Ensuring workplace health through enhanced safety protocols, including PPE for frontline staff.

2020 OUTLOOK

Cigna's outlook for full year 2020 adjusted revenues^1,3 is $154 billion to $156 billion. Cigna's outlook for full year 2020 consolidated adjusted income from operations^2,3 on a per share basis is in the range of $18.00 to $18.60 per share.  Cigna's outlook excludes potential effects of any future share repurchase³.  Also, while Cigna continues to expect to close the sale of Cigna's Group Disability and Life business in the third quarter of 2020, Cigna's outlook assumes a full year of contributions from the Group Disability and Life business. 

The foregoing statements represent the Company's current estimates of Cigna's 2020 consolidated adjusted revenues^1,3 and adjusted income from operations^2,3 on a per share basis as of the date of this release.  Actual results may differ materially depending on a number of factors.  Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release.  Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna's website in the Investor Relations section (https://www.cigna.com/aboutcigna/investors).  Management will be hosting a conference call to review second quarter 2020 results and discuss full year 2020 outlook beginning today at 8:30 a.m. ET.  A link to the conference call is available in the Investor Relations section of Cigna's website located at https://www.cigna.com/aboutcigna/investors/events/index.page. 

The call-in numbers for the conference call are as follows:
            Live Call
            (888) 324-7575   (Domestic)
            (210) 234-0013   (International)
            Passcode: 7302020

            Replay
            (800) 839-1171   (Domestic)
            (203) 369-3030   (International)

It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.

About Cigna

Cigna Corporation (NYSE: CI) is a global health service company dedicated to improving the health, well-being and peace of mind of those we serve. Cigna delivers choice, predictability, affordability and access to quality care through integrated capabilities and connected, personalized solutions that advance whole person health. All products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company, Cigna Life Insurance Company of New York, Connecticut General Life Insurance Company, Express Scripts companies or their affiliates, and Life Insurance Company of North America. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, and other related products including group life, accident and disability insurance. 

Cigna maintains sales capability in over 30 countries and jurisdictions, and has more than 185 million customer relationships throughout the world. To learn more about Cigna^®, including links to follow us on Facebook or Twitter, visit www.cigna.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made in connection with this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning our projected consolidated adjusted income from operations outlook for 2020 on a per share basis; projected adjusted revenue outlook for 2020; future financial or operating performance, including our ability to deliver affordable, personalized and innovative solutions for our customers and clients, in light of the challenges presented by the COVID-19 pandemic; future growth, business strategy, strategic or operational initiatives, including our organizational efficiency plan; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions, including the merger (the "Merger") with Express Scripts Holding Company and the sale of our U.S. Group Disability and Life business; our ongoing operational response to the COVID-19 pandemic; and other statements regarding Cigna's future beliefs, expectations, plans, intentions, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage medical and pharmacy costs and price effectively; our ability to adapt to changes or trends in an evolving and rapidly changing industry; our ability to effectively differentiate our products and services from those of our competitors and maintain or increase market share; our ability to develop and maintain good relationships with physicians, hospitals, other health care providers, producers, consultants, and pharmaceutical manufacturers; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing; the impact of modifications to our operations and processes; our ability to identify potential strategic transactions and realize the expected benefits (including anticipated synergies) of such transactions in full or within the anticipated time frame, including with respect to the Merger and the sale of our Group Disability and Life business, as well as our ability to integrate or separate operations, resources and systems; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits, investigations, actions or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems and those of our key suppliers or other third parties; the impact of our debt service obligations on the availability of funds for other business purposes; unfavorable industry, economic or political conditions, including foreign currency movements; acts of civil unrest, war, terrorism, natural disasters or pandemics; reinsurance credit risk; the scale and scope of the COVID-19 pandemic and its potential impact on our business, operating results, cash flows and financial condition, as well as on our employees, clients, customers, suppliers and partners and on the U.S. and global economies; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K, our Form 10-Q for the quarter ended March 31, 2020 and subsequent reports on Forms 10-Q and 8-K available through the Investor Relations section of www.cigna.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

INVESTOR RELATIONS CONTACT:
Will McDowell
215-761-4198
william.mcdowell2@cigna.com

MEDIA CONTACT:
Ellie Polack
860-902-4906
elinor.polack@cigna.com