Cigna reported net income increased 6% year over year to $1.6 billion during the second quarter as fewer people were admitted to the hospital, had fewer surgeries and visited the emergency room less.
The Connecticut-based insurer said medical costs for both COVID-19 and non-COVID-19 care were lower than projected. The insurer’s medical loss ratio, an important measure of how much is spent on medical care, fell to 80.7% for the second quarter. Analysts said price hikes helped the MLR, too.
As a result of the quarterly performance, Cigna raised financial targets for the year for revenue and income from operations.
Cigna’s second quarter performance beat Wall Street expectations. Shares were trading up more than 3% following the Thursday morning call with investors.
One analyst characterized the quarter as “strong broad-based” results, according to a note from SVB Securities.
Medical costs were well-controlled in the quarter, SVB Securities said, and added that the MLR was “driving the bulk of the outperformance.”
Total medical membership increased 4% to 17.8 million members. The growth was driven by commercial membership as Cigna insured fewer people in government-sponsored programs like Medicare Advantage.
Although Cigna reported lower utilization for the quarter, preventative screenings were reportedly in line with 2019 pre-pandemic trends.