Cigna faces risks from potential claim cost overruns, especially in the Cigna Healthcare segment. Investment losses, particularly the impairment of VillageMD equity, are a significant concern. Interest rate increases pose a risk to the fair value of long-term debt. Geopolitical and economic uncertainties affect investment portfolios and could lead to further credit deterioration. Litigation, including the Express Scripts case, presents potential liabilities. Regulatory scrutiny and assessments also pose risks.
Financial Upside
Cigna's pharmacy revenues and premiums are growing, driven by customer growth and premium rate increases. Affordability initiatives and favorable contract pricing contribute to gross profit. Evernorth Health Services and Cigna Healthcare show positive pre-tax adjusted income from operations. The sale of Medicare Advantage businesses to HCSC presents a potential $3.7 billion in transaction value. Share repurchases are ongoing, potentially increasing shareholder value.
