By Anna Wilde Mathews

Cigna's quarterly earnings fell well short of Wall Street's expectations, as high healthcare costs hurt results in a segment of its insurance business.

-- The company, parent of a pharmacy-benefit manager as well as its namesake insurer, reported adjusted income of $6.64 a share for the fourth quarter.

-- That compared to the $7.82 projected by analysts polled by FactSet.

-- Cigna said it expected at least $29.50 a share in adjusted earnings in 2025. Analysts were estimating $31.48.

While other managed-care companies have been hurt by healthcare costs in their Medicare and Medicaid lines, Cigna hasn't been affected as much, because it largely focuses on employers. The company is selling its Medicare business.

But in the fourth quarter, Cigna had problems in its stop-loss business. Cigna sells stop-loss to employers, and it covers their medical costs once they rise above a certain level. Client costs were higher than expected, forcing the Cigna unit to pay out more.

Chief Executive David Cordani said Cigna is "taking corrective actions to address these near-term pressures" in its stop-loss business. Another company, Voya Financial, flagged higher-than-expected stop-loss costs last month.

In another sign of rising healthcare costs, Cigna's medical-loss ratio, or the share of premiums paid out in claims, was 87.9%, well above the 84.7% expected by analysts.

Quarterly net income was $1.4 billion, compared to $1 billion a year earlier. Revenue rose to $65.7 billion from $51.1 billion in 2023.

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January 30, 2025 06:04 ET (11:04 GMT)

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