Cigna profit drops 16.4% due to rising medical expenses Reuters

© Reuters. File photo: On July 16, 2019, the Cigna Corp. logo was displayed on the screen of the New York Stock Exchange (NYSE) in the United States. REUTERS/Brendan McDermid/File Photo

(Reuters)-Health Insurance Company Cigna (New York Stock Exchange stock code:) announced on Wednesday that the profit for the second quarter fell by 16.4%, affected by rising medical costs, and said that the negative impact of COVID-19 on earnings per share in 2021 is expected to be approximately US$2.50.

The company also has a pharmacy benefit management business, and the company said that as demand for non-COVID healthcare services normalized, its medical costs in the reporting quarter increased.

Due to the ongoing pandemic, health insurance companies have benefited to a large extent from patients’ use of discretionary medical services, but as more and more Americans are vaccinated, demand for these services is recovering.

Five analysts surveyed by Refinitiv said that Cigna’s health care ratio, which is the ratio of medical claims expenditure to premium income, dropped from 70.5% in the same period last year to 85.4%, compared to an estimate of 81.04%.

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