Cigna Reports Strong Revenue Growth in 2025 Despite Industry Challenges
Cigna Reports Strong Growth in 2025 Amid Market Challenges
Global health insurer, The Cigna Group, announced significant growth in revenue and earnings for 2025. This aligns with trends in the U.S. managed care sector, highlighting a growing disparity between diversified health services companies and traditional insurers facing challenges from medical cost inflation and regulatory compliance requirements.
Cigna's total revenue for the year reached $274.9 billion, marking an 11% increase compared to 2024. This growth was primarily driven by Evernorth Health Services, positioning Cigna as a leader in industry revenue expansion. In comparison, UnitedHealth Group experienced high single-digit growth, while CVS Health saw slower growth due to rising medical costs in its Aetna unit. Similarly, Elevance Health reported moderate growth, reflecting its focus on payer-centric operations.
Fourth Quarter Financial Performance
For the fourth quarter, Cigna's adjusted revenues rose 10% year-over-year to $72.5 billion. This reflects a trend among peers emphasizing pharmacy benefit management and specialty pharmacy services over simple membership growth. Shareholders enjoyed an increase in net income to $6.0 billion, or $22.18 per share, from $3.4 billion the previous year, which was affected by a one-time investment loss.
Adjusted operating income climbed to $8.0 billion, or $29.84 per share, a contrast to the margin pressures seen by CVS Health and Elevance due to higher utilization rates in Medicare Advantage and outpatient services. While UnitedHealth reported earnings growth, it faced volatility linked to rising care delivery costs.
Role of Evernorth and Customer Growth
Evernorth significantly contributed to Cigna's incremental growth, mirroring successes in UnitedHealth's Optum and CVS Health's Caremark units. Key growth drivers included specialty pharmacy, pharmacy benefits, and behavioral health services. Cigna’s customer relationships rose by 3% to 188.4 million, fueled by a 4% increase in pharmacy customers and an 18% increase in behavioral health customers, aided by a new government contract.
However, Cigna's medical membership dropped 5% to 18.1 million, impacted by a transaction with HCSC. Excluding this event, membership levels remained largely stable, unlike the fluctuations experienced by competitors, especially in the Medicare Advantage sector.
Risk Management and Future Projections
In 2025, despite pressures from outpatient care, behavioral health utilization, and specialty drugs, Cigna's medical cost trends were in line with expectations. Conversely, peers like CVS Health and Elevance cited unexpectedly high utilization as a negative impact on margins. Cigna issued a medical care ratio guidance for 2026 of between 83.7% and 84.7% for Cigna Healthcare, indicating effective cost management compared to its industry peers.
The company demonstrated operational efficiency with a reduction in the SG&A expense ratio to 5.3% from 6.0% in 2024. It also ended the year with a debt-to-capitalization ratio of 43.0%, consistent with UnitedHealth and Elevance. During the year, Cigna repurchased $3.6 billion in shares and increased its quarterly dividend to $1.56 per share, in line with a focus on capital returns amidst regulatory changes.
Looking ahead to 2026, Cigna anticipates adjusted revenues of approximately $280 billion and at least $7.95 billion in consolidated adjusted operating income, or $30.25 per share. Evernorth is projected to contribute at least $6.9 billion in pre-tax adjusted income, with Cigna Healthcare adding a minimum of $4.5 billion. These results reinforce Cigna’s leading position in the U.S. health insurance sector, with diversified services providing some resilience against the cost fluctuations affecting traditional insurer peers.