Everything looks great on paper until you actually look at the bottom line. Honestly, the 2024 story for The Cigna Group is a bit of a head-scratcher. If you just saw the revenue line, you'd think they were printing money. They brought in $247.1 billion. That is a massive 27% jump from the year before. But here's the thing: despite that giant pile of cash coming in, their actual net income took a serious dive.
We’re talking about a drop from $5.2 billion in 2023 to $3.4 billion in 2024.
Why the disconnect? It basically comes down to a few big "potholes" and one massive engine that won't stop running. While the insurance side of the house felt some pain, the pharmacy and services side—what they call Evernorth—was doing the heavy lifting.
The Cigna Group Earnings 2024: The VillageMD Problem
You can't talk about these numbers without mentioning the $2.7 billion elephant in the room. This was a non-cash investment loss related to VillageMD. Essentially, Cigna had to admit that their stake in those primary care clinics wasn't worth what it used to be. It’s a classic case of a big bet not paying off as quickly or as smoothly as the board hoped.
When you strip away that accounting headache and look at the "adjusted" numbers, the picture gets a lot prettier. Their adjusted income from operations actually rose 4% to $7.7 billion. For investors, this is the "real" number they care about because it ignores the one-time mess of the VillageMD impairment.
Still, $27.33 per share in adjusted earnings is nothing to sneeze at, even if it was just a tiny bit lower than what some of the more aggressive analysts were looking for by the end of the year.
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Medical Costs and the Stop-Loss Struggle
One thing that really annoyed the Cigna leadership in the fourth quarter was something called "stop-loss" medical costs. If you aren't a health insurance geek, stop-loss is basically insurance for the insurers (or for large employers who pay their own claims).
Cigna Healthcare—the part of the company that actually handles the doctors and the patients—saw its margins squeezed because people were using more medical services than predicted.
You’ve probably heard about this across the whole industry. Everyone from UnitedHealth to CVS has been complaining that people are finally going back to the doctor for all the stuff they put off. Cigna wasn't immune. Their Medical Care Ratio (MCR) ticked up to 83.2% for the year.
Evernorth: The Secret Sauce
If Cigna was just a health insurance company, 2024 might have been a lot more depressing. But they aren't. They’re basically a pharmacy giant that also happens to sell insurance. Evernorth Health Services is the part of the business that includes Express Scripts, and it had a monster year.
Adjusted revenue for Evernorth’s pharmacy benefit services hit $111.8 billion. That’s a 46% increase. Think about that for a second. While the insurance side was worrying about rising surgery costs, the pharmacy side was winning new big-name clients and scaling up.
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- Specialty Drugs: This is where the real growth is. Think high-cost treatments for complex conditions.
- Biosimilars: Cigna made a huge push here, especially with Humira alternatives. By the end of 2024, nearly 50% of eligible prescriptions were for biosimilars.
- Operational Efficiency: They actually managed to lower their expense ratio (SG&A) from 7.3% down to 5.9%. That’s a lot of "lean" for a company that big.
Breaking Down the Customer Base
Membership numbers tell a weird story too. At the end of 2024, they had about 19.1 million medical customers. That’s actually a slight drop from 2023. Why? Well, they’ve been cleaning house.
They made the strategic decision to exit the Medicare Advantage business, selling it off to Health Care Service Corporation (HCSC). That deal didn't fully close until early 2025, but the "look" of the company started shifting throughout 2024. They’re moving away from the volatile government-funded plans and doubling down on employer-sponsored health and high-margin pharmacy services.
On the pharmacy side, though, they added millions of new relationships. Total customer relationships jumped 11% to over 182 million. It turns out it's a lot easier to sell someone a prescription management plan than a full-blown insurance policy.
What about the stock?
Throughout 2024, the stock was a bit of a rollercoaster. It underperformed the S&P 500 for a good chunk of the year. Investors were worried about PBM (Pharmacy Benefit Manager) regulations in D.C. and those rising medical costs.
But Cigna did what big companies do when the stock is sluggish: they bought it back. They spent $7 billion repurchasing 20.9 million shares. They also hiked the dividend by 8% to $1.51 per share. It’s their way of saying, "We know it's a bit messy right now, but we have plenty of cash."
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The Real-World Impact
What does this mean for the average person? Probably not a lower premium, let's be real. Cigna is explicitly telling investors they plan to raise rates in 2025 and 2026 to "recapture" the margins they lost to those high medical costs.
If you’re on a Cigna plan through your job, you might notice a bigger push toward their own "specialty" pharmacies. They want to keep the money inside the family. When they control the insurance plan and the pharmacy that ships the drug, they win twice.
Moving Forward: Actionable Insights for 2025
So, the 2024 books are closed. What do you do with this information? Whether you're an investor or just someone trying to navigate your health plan, here’s the play.
For Investors: Keep a close eye on the HCSC deal integration. Now that the Medicare business is largely gone, Cigna is a "pure play" on commercial health and pharmacy services. The 2025 guidance is already looking for at least $252 billion in revenue. If they can keep that 10-14% EPS growth algorithm going without another VillageMD-style write-down, the valuation looks pretty attractive compared to peers who are still struggling with Medicare Advantage.
For Employers and HR Managers: Expect premium increases. Cigna was quite vocal about the fact that their stop-loss business got hit hard. They are going to be "disciplined" (which is corporate-speak for "expensive") with their renewals. Now is the time to look at those biosimilar options they’re pushing—it’s one of the few areas where they are actually trying to drive costs down to keep you as a client.
For Patients: If you use specialty medications, check your formulary. Cigna’s success in 2024 was built on moving people to biosimilars. If you’re still on a brand-name biologic, you might find your co-pay suddenly spiking or a "suggested alternative" appearing in your inbox.
The Cigna Group is clearly a company in transition. They are shedding the parts of the business that are too dependent on government whims and pivoting hard toward being a technology-driven pharmacy powerhouse. 2024 was the year of "clearing the decks." 2025 will be the year we see if that leaner, pharmacy-heavy ship can actually outrun the rest of the industry.