CI Cigna Group 10-Q 2026-09-30 section summaries

The Cigna Group — Q3 and nine months ended September 30, 2026

Consolidated results

Revenue grew 5.6% in both Q3 and the first nine months. Q3 operating income fell 7.1% and shareholder net income fell 22.8%, while nine-month operating income rose 8.4% and shareholder net income increased slightly. Q3 noncontrolling-interest income rose to $256 million from $105 million. Nine-month net investment gains were $225 million versus $76 million; Q3 gains were $36 million versus $26 million, primarily reflecting derivative fair-value changes associated with certain equity securities.

Q3 segment results

Management’s adjusted segment measures exclude specified investment items, acquired-intangible amortization and special items; they are not GAAP revenue or operating income. External-customer revenue differs from adjusted segment revenue, in part because of intersegment activity.

Evernorth adjusted revenue grew 5.6%, but adjusted operating income declined 3.9% as pharmacy and other service costs rose 5.6%, to $60.519 billion from $57.326 billion. Cigna Healthcare adjusted revenue increased 8.9% and adjusted operating income rose 14.9%; medical costs increased 8.6%, to $8.228 billion from $7.579 billion. Despite Q3 growth, Cigna Healthcare adjusted revenue fell 3.0% for 9M, to $34.913 billion from $35.991 billion. Intersegment revenue principally reflects pharmacy and care-services transactions between Evernorth and Cigna Healthcare.

Q3 pharmacy revenue growth was led by network revenue, up to $34.909 billion from $32.525 billion; home-delivery and specialty revenue was nearly flat at $20.485 billion versus $20.513 billion. Cigna Healthcare premiums were $9.684 billion versus $8.936 billion. For 9M, Medicare Advantage premiums were nil versus $2.363 billion in 2025, and other U.S. Healthcare premiums declined to $1.553 billion from $2.822 billion, reflecting the prior sale of Medicare Advantage and related businesses to HCSC in March 2025. Cigna announced in April 2026 that it plans to exit Individual and Family Plans effective January 1, 2027.

Balance sheet and cash flow

Equity less goodwill and other intangible assets implies negative tangible equity of $28.570 billion. Net receivables were $31.492 billion, up from $28.768 billion; related allowances increased to $8.0 billion from $6.8 billion, including a $240 million expected-credit-loss allowance versus $199 million.

Cigna repaid $550 million of 1.250% senior notes at maturity in March. It had no borrowings on its $6.5 billion revolver, which matures in April 2030, and approximately $0.5 billion of commercial paper outstanding at a 4.09% average rate. Interest expense was $356 million in Q3 2026 versus $363 million, and $1.1 billion in both nine-month periods. The Board declared a $1.56-per-share Q4 dividend.

Claims, investments and other risks

Nine-month Cigna Healthcare incurred claims costs were $24.053 billion versus $25.444 billion; favorable prior-year development was $356 million versus $319 million, equivalent to 1.1% versus 0.8% of prior-year incurred costs. The favorable development reflected utilization below assumptions, but ultimate claims remain sensitive to utilization and medical-cost trends. Unpaid claims and claim expenses were $4.988 billion, compared with $4.241 billion at year-end 2025.

Total investments were $20.152 billion. Debt securities had $9.028 billion amortized cost and $8.401 billion fair value, a $635 million shortfall versus $367 million at year-end, primarily due to higher rates. Equity securities had $7.174 billion cost and $3.827 billion carrying value. Commercial mortgage loans totaled $1.202 billion, with a 72% average loan-to-value ratio; higher-risk loans with 80%–100% LTV had $186 million carrying value and 0.96 average debt-service coverage. Level 3 assets were $1.123 billion; valuation relies on unobservable liquidity adjustments. The fair value of long-term debt was $27.360 billion versus $31.045 billion carrying value.

Nine-month other comprehensive loss was $1.666 billion versus $458 million, mainly due to a $1.752 billion loss from measurement adjustments to long-duration insurance and contractholder liabilities, primarily reflecting discount-rate changes. Accumulated other comprehensive loss reached $4.472 billion. The enterprise-wide optimization program, expected to continue through 2028, incurred $535 million pre-tax in 9M 2026 ($405 million after tax), versus $566 million ($429 million); cumulative costs reached $1.284 billion pre-tax. The program includes severance, impairments and wind-downs of smaller businesses.

Other exposures include $1.4 billion of confirmed supplier-finance obligations, predominantly tied to one supplier, and $1.9 billion of Evernorth financial and performance guarantee liabilities. Berkshire reinsures Cigna’s variable-annuity business, subject to an overall limit with approximately $3.0 billion remaining; Cigna remains responsible for policyholder obligations if reinsurers fail to perform. Routine litigation, regulatory inquiries and investigations include False Claims Act matters.

Cigna (CI) — Q3 and 9M 2026 results

Consolidated results

Amounts in $B except per-share data. 9M columns are included for consolidated results.

Revenue grew 6% in both Q3 and 9M. Q3 shareholders’ net income fell 23%, principally because the prior-year quarter included an after-tax business-sale gain that did not recur, with lower investment performance also contributing. For 9M, higher operating income and investment performance largely offset the absence of that prior-year gain. The effective tax rate was 19.1% versus 14.0% in Q3 and 18.0% versus 15.9% for 9M.

Adjusted results exclude acquired-intangible amortization, investment results and special items. Special items were $0.168B pre-tax/$0.146B after-tax in Q3 2026, versus $0.174B/$-0.061B in Q3 2025; for 9M, $0.747B/$0.621B versus $0.767B/$0.339B. Investment results included net gains of $0.036B versus $0.026B in Q3 and $0.225B versus $0.076B for 9M. Interest expense and other was $0.333B versus $0.347B in Q3 and $1.046B in both 9M periods.

Segments

Adjusted revenue and pre-tax adjusted operating income; amounts in $B. Segment tables show Q3; 9M figures are added where year-over-year growth diverged by at least 3 percentage points from Q3.

Dashes indicate lines whose 9M growth did not diverge from Q3 by the specified threshold. Equity-method investment-result adjustments reconciling adjusted to GAAP revenue were $(0.110)B versus $0.178B in Q3 and $(0.023)B versus $0.272B for 9M.

Evernorth’s Q3 revenue grew 6%, but income fell 4%; its pre-tax margin declined to 2.9% from 3.2%. Pharmacy Benefit Services revenue growth reflected claims composition, while income was pressured by client-focused initiatives, partly offset by Specialty and Care Services growth and operating efficiencies. These initiatives include contract renewals, investment in a rebate-free model and recontracting around affordability and government programs, including the Inflation Reduction Act. Q3 pharmacy claims volume was 546M versus 558M; 9M volume was 1,610M versus 1,645M. Specialty and Care Services benefited from higher customer claims volume. Drug mix, branded and specialty-drug costs, manufacturer pricing and regulatory and client dynamics remain important factors.

Cigna Healthcare’s Q3 revenue and income improved, while 9M revenue declined 3%, chiefly reflecting the HCSC transaction’s $3.850B revenue impact. Higher premiums of $2.167B partly offset that effect, led by employer-insured and stop-loss business. Its medical care ratio was 85.0% versus 84.8% in Q3 and 83.1% versus 83.3% for 9M. Q3 pressure included higher U.S. Employer costs, partly offset by lower Individual and Family Plans costs; 9M improvement reflected the HCSC transaction and lower Individual and Family Plans costs, partly offset by U.S. Employer mix. Cigna announced plans to exit Individual and Family Plans medical business effective January 1, 2027.

Operating metrics

Medical customers rose 2%, as growth in administrative-services-only customers outweighed the decline in insured customers. Unpaid claims and claim expenses were $4.988B at September 30, 2026, versus $4.241B at December 31, 2025, primarily due to stop-loss seasonality.

Cash flow, liquidity and capital allocation

Amounts in $B; cash flow and capex are for 9M.

Operating cash flow declined primarily due to unfavorable Inflation Reduction Act-related cash flow and lower insurance liabilities, partly offset by receivables timing and lower inventory purchases. Lower investment purchases reduced investing cash used, while the prior-year period included HCSC net proceeds. At September 30, 2026, cash and short-term investments were $6.5B, including approximately $1.2B at the parent or certain non-regulated subsidiaries. Cigna also had $6.5B of undrawn revolving-credit capacity and $6.0B of remaining commercial-paper capacity; commercial paper outstanding was $0.5B. Debt-to-capitalization declined to 41.8% from 43.0% at December 31, 2025. Regulatory restrictions limit the timing and amount of some subsidiary distributions. Cigna cautioned that unexpected earnings shortfalls or other material adverse risks could weaken liquidity; it reported no material changes in guarantees or contractual obligations during the nine months.

Investments, strategy and risks

Debt securities had a carrying value of $8.4B at both September 30, 2026 and December 31, 2025; net unrealized depreciation reflected generally rising interest rates in recent years. At September 30, $7.5B (89%) was investment grade and $0.9B below investment grade, mostly at the higher end of that rating category. The $1.2B commercial mortgage portfolio comprised approximately 40 fixed-rate loans; office properties were about 26%. Cigna cited borrower equity generally of 30%–40%, property quality and loan metrics as support for performance, and did not expect potential office-loan deterioration to materially affect results, financial condition or liquidity. Other long-term investments totaled $5.4B, with less than 2% exposed to office real estate; private-equity and real-estate valuation changes may continue to cause volatility. Cigna’s 50% share of the China insurance joint venture’s supporting portfolio was approximately $21.9B, about 75% debt securities, 20% equities and 5% long-term deposits and policy loans; no investments had a material unrealized loss.

Third-quarter impairment evaluations found no impairment of goodwill or indefinite-lived intangible assets, and estimated reporting-unit fair values substantially exceeded carrying values. Cigna reported no significant changes to critical accounting estimates. At its September 2026 Investor Day, it announced Accelerate to One, a multi-year modernization and productivity initiative through 2030; some savings are expected to be reinvested in growth and innovation, while timing and magnitude remain uncertain. The separate 2025 Strategic Optimization Program continues.

Key risks include healthcare-cost inflation and claims experience, pricing and margin pressure, drug pricing and pharmacy-network changes, regulatory and litigation exposure, privacy and cybersecurity, IT and AI risks, third-party and transaction execution, market volatility, indebtedness, insurer-rating downgrades and reinsurer credit risk.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This section contains no separate market-risk figures or disclosures. It incorporates by reference the “Market Risk” discussion in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2026. No changes in internal control over financial reporting during the quarter ended September 30, 2026 materially affected, or were reasonably likely to materially affect, the company’s internal control over financial reporting.

This section directs readers to the risk factors in Part I, Item 1A of Cigna’s Form 10-K for the year ended December 31, 2025, which may affect the company’s results of operations, financial condition, and liquidity.

During the three months ended September 30, 2026, no Company director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. This section reports no financial results or other material business developments.