Business Strategy and Outlook| Julie Utterback, CFA |
With its roots in health insurance and the late 2018 merger with top-tier pharmacy benefit manager Express Scripts, Cigna provides healthcare-related services through customizable programs paid for primarily by U.S. employers and government agencies. We think its strategy of reducing medical cost growth should resonate well with existing and potential clients. Healthcare cost trends in the United States remain significantly above inflation, but Cigna has set an ambitious goal to remedy that for its commercial clients, pushing down that trend to or even below the consumer price index in the near future. If Cigna can achieve that goal, clients should benefit along with Cigna, and we think this reduction in its cost trend may help Cigna attract more business from existing and potential clients.