AM Best Affirms Credit Ratings of The Cigna Group and Its Subsidiaries - Seite 2

Cigna Life & Health Group has a track record of strong operating performance, demonstrated by a five-year weighted average return-on-equity ratio exceeding 28%. Earnings from the insurance operations have been driven largely by the group’s core commercial segment. AM Best also notes that Cigna Life & Health Group continues to operate under a lower risk model as a majority of its commercial business is operated under self-funded/administrative services only employer group contracts, versus fully insured. Underwriting and net income each has remained strong over the past five years. AM Best expects prospective earnings to remain positive, underpinned by profitable underwriting results. Cigna’s insurance operations are less exposed to government programs compared with its peers, resulting in higher margins, and the organization has demonstrated profitable growth in the commercial segment over the past several years. Cigna has reported premium growth in its core businesses and looking forward, growth is projected for 2024. On Jan. 31, 2024, it was announced that Cigna entered into an agreement to sell its Medicare business to Health Care Service Corporation. The transaction is expected to close in the first quarter of 2025.

Cigna Life & Health Group’s business profile is viewed as favorable, driven by a strong position in the competitive health care market. Cigna has been increasing its penetration into the U.S. commercial health market through organic growth. Cigna maintains a diverse product portfolio of health care products. The organization also offers specialty health care products and services that include medical management, disease management and other health advocacy services to employers and other plan sponsors. The growth of Evernorth health services business, as well as the parent’s retained international core medical business, provide Cigna an expanded customer base, earnings diversification and medical cost management capabilities.

The organization has a comprehensive ERM program with mature governance. The program is integrated into day-to-day operations and strategic business planning. Each business unit has its own heat map, which rolls up to an enterprise-level heat map.

The organization also employs a formal risk appetite statement that includes key principles and key tolerances and limits. Cigna utilizes economic capital modeling and stress testing.

The ratings of CIGNA Life Insurance Company of Europe S.A.- N.V. reflects its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Additionally, the company benefits from rating enhancement from Cigna.