At its recently held investors’ meeting, health insurer CIGNA Corp. (CI), reaffirmed its 2012 adjusted earnings guidance range of $1.52-$1.63 billion. This would translate into a year-over-year growth rate of 12%-20%. On a per-share basis, earnings are expected in the $5.20-$5.50 range, reflecting growth of 5%-12% year over year.
Cigna also provided a segment wise breakup of core earnings with HealthCare, International, Group Disability & Life expected to contribute $1.19-$1.26 billion, $2.65-$2.85 billion and $2.60-$2.80 billion, respectively. However, its Run-off segment is expected to post an adjusted loss of $1.95 billion.
Regarding growth opportunities for 2013 and beyond, Cigna expects mid single-digit revenue growth in its U.S Commercial line of business, owing to increasing demand for improved health care solutions & lower costs. The company expects to achieve market expansion via its consultative selling, differentiated Health and productivity solutions and its unique funding alternatives.
Cigna expects high single- to low double-digit growth in revenue in the Medicare/Senior Healthcare business. This growth is expected following improving demographics, geographic expansion, differentiated physician engagement and leading service and quality.
Its International business is expected to be its chief driver of future growth and Cigna projects mid-teens revenue growth from the segment. This growth will be prompted by growing middle class in the emerging markets, increasing demand for globally mobile solutions, and its global delivery infrastructure.
Cigna also sees meaningful future opportunities in its U.S Individual and Retail lines of business. The recently concluded HealthSpring transaction is expected to drive meaningful future growth.
Cigna is working aggressively on its three-pronged strategy of Go Deep, Go Global and Go Individual. With a proven leadership team and adequate financial strength, the company is set to present a differentiated earnings performance and provide substantial shareholder return in the coming years.
Cigna also issued a strong capital outlook with increased capital of $550 million available for deployment, of which $295 million is committed to the pending acquisition of the Great American Supplemental Benefits Group.
Despite an acute uncertainty in the health insurance industry, related to the Health Care Reform Act, the company managed to post a three-year compound annual growth rate (CAGR) of +5% for revenue and +9% for earnings.
The company’s focus on health improvement, a strong consultative sales force, strong national franchise for commercial business and Medicare, consistent and effective services and clinical delivery has helped it to win customers.
Peer Aetna Inc. (AET) also affirmed its 2012 earnings per share (EPS) guidance of $5.00 at the company’s recently held investors’ meeting.
