Cigna posts nearly 3% rise in profit as Evernorth powers growth

Nov 5 (Reuters) - Cigna Corp reported a 2.74% rise in quarterly profit and raised its full-year sales target on Thursday, driven by higher sales in its newly revamped health services unit that mainly houses its pharmacy benefits management business.

The health insurer in September rebranded the unit to Evernorth, comprising the pharmacy benefits management business it acquired through the 2018 buyout of Express Scripts as well as its specialty pharmacy business Accredo.

Adjusted revenue from Evernorth rose about 20% to $29.83 billion in the third-quarter, driven by a 22% jump in adjusted pharmacy prescription volumes.

The company raised its 2020 revenue target to about $158 billion, from its previous outlook of $154 billion to $156 billion. It also raised the lower end of its adjusted profit expectations, forecasting full-year adjusted earnings of $18.30 to $18.60 per share compared with the previous $18.00 to $18.60.

Cigna’s medical care ratio - the amount spent on medical claims versus the income from premiums - worsened to 82.6% in the quarter from 80.5% a year ago, as demand began to normalize for elective healthcare services that were postponed during the height of the pandemic.

Rivals UnitedHealth, Anthem Inc and Humana Inc have also warned of higher costs in the second half of the year as demand for healthcare services normalizes and due to COVID-19 testing and treatment related expenses, but stuck to their long-term growth forecasts.

The health insurer said net income attributable to shareholders rose to $1.39 billion, or $3.78 per share, in the quarter ended Sept. 30, from $1.35 billion, or $3.57 per share, a year earlier. (Reporting by Manojna Maddipatla in Bengaluru; Editing by Saumyadeb Chakrabarty)