Global health service company
"As Cigna accelerates our focus on whole person health, our strong second quarter results reflect the value we deliver to customers and clients, and our consistent execution in a dynamic environment," said
Total revenues for second quarter 2019 were
Shareholders' net income for second quarter 2019 was
Cigna's adjusted income from operations2 for second quarter 2019 was
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.
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 strong revenue and earnings growth, as we deepened customer relationships, delivered strong medical and pharmacy cost performance, and continued innovation across our businesses. Second quarter 2019 adjusted income from operations2 also included a
* Year to date through
* The debt to capitalization ratio decreased to 47.2% at
* The SG&A expense ratio5 was 9.0% for second quarter 2019, a significant decrease from 23.5% for second quarter 2018, driven by business mix changes resulting from the
The following table summarizes our medical customers and overall customer relationships:
* The total medical customer base6 at second quarter 2019 was 17 million, an organic increase of 36,000 customers year to date and 207,000 over second quarter 2018 driven by growth in the Select and Middle Market segments, partially offset by a decline in National Accounts.
* The pharmacy customer base6 at second quarter 2019 was 75 million, an organic increase of 1.9 million customers year to date, driven by strong new commercial sales.
* Pharmacy6 and Medicare Part D customers in the first and second quarter 2019 and fourth quarter 2018 include customers gained through the completion of the
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 1 for a reconciliation of adjusted income (loss) from operations2 to shareholders' net income.
This segment includes a broad range of pharmacy services, including benefits management, specialty pharmacy services, clinical solutions, home delivery, and health management services.
* Cigna completed the combination with
* Growth in second quarter 2019 adjusted revenues1 and adjusted income from operations, pre-tax2 over second quarter 2018 were driven by the combination with
* Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect organic growth in adjusted pharmacy script volumes as well as strong performance in specialty pharmacy care.
* Health Services fulfilled 294 million adjusted pharmacy scripts9 in second quarter 2019, and 292 million adjusted pharmacy scripts9 in first quarter 2019.
This segment includes Cigna's
* Second quarter 2019 adjusted revenues1 increased 10% relative to second quarter 2018, driven by Commercial customer growth and deepening of relationships, as well as premium increases consistent with underlying cost trends.
* Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect strong medical and specialty contributions and continued effective medical cost management.
* Adjusted income from operations, pre-tax2 for second quarter 2019, first quarter 2019, and second quarter 2018 included favorable net prior year reserve development on a pre-tax basis of
* The medical care ratio5 ("MCR") of 81.6% for second quarter 2019 reflects continued effective execution in our commercial and government businesses. The second quarter 2019 MCR increased relative to second quarter 2018, as expected, driven by the inclusion of the Express Scripts Medicare Part D business, the pricing effect of the health insurance tax suspension, and a higher MCR in our individual medical business.
* Integrated Medical net medical costs payable10 was approximately
This segment includes supplemental health, life and accident insurance products and health care coverage in our international markets, as well as health care benefits for globally mobile employees of multinational organizations.
* Excluding the impact of foreign currency movements, second quarter 2019 adjusted revenues1,7 grew 8% over second quarter 2018 reflecting continued business growth.
* Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect continued business growth and a favorable loss ratio, partially offset by unfavorable foreign currency impacts.
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
* Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect solid disability and life performance as well as the impact of the run-off businesses.
Corporate reflects interest expense, as well as amounts not allocated to operating segments and includes intersegment eliminations.
* Second quarter 2019 adjusted loss from operations, pre-tax2 increased relative to second quarter 2018 as a result of higher interest expense associated with the financing of the combination with
Cigna's outlook for full year 2019 consolidated adjusted income from operations2,3,4 is in the range of
Health Services' projected 2020 retention rate for the 2019 selling season for pharmacy services is now in the range of 97% to 98%, an increase of 50 bps from the midpoint of our previous expectations. Health Services' adjusted pharmacy scripts 9 are expected to grow 25 to 35 million scripts organically in 2020.
The foregoing statements represent the Company's current estimates of Cigna's 2019 consolidated and segment adjusted income from operations2,3,4 and other key metrics 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 (http://www.cigna.com/aboutcigna/investors). Management will be hosting a conference call to review second quarter 2019 results and discuss full year 2019 outlook beginning today at
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Cigna maintains sales capability in over 30 countries and jurisdictions, and has more than 165 million customer relationships throughout the world.
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- Total revenues in the second quarter were
- Shareholders' net income for the second quarter was
- Adjusted income from operations2 for the second quarter was
- Adjusted income from operations2,3,4 is now projected to be in the range of