Cigna CEO David Cordani said he expects COVID-19 to create new urgency in the industry's need to innovate.
The pandemic, he said on the insurers' earnings call Thursday morning, has "highlighted opportunity for improvement" across the healthcare industry, which will likely "accelerate change."
"This evolution is likely to usher in a new call for and embrace of innovative and disruptive solutions, a new wave of broadened partnerships and a need for even greater levels of differentiated value in the marketplace," Cordani told investors.
Similar to its industry peers, Cigna's first-quarter 2020 performance was not hampered significantly by the COVID-19 pandemic. However, Cordani said that Cigna is bracing for headwinds due to the economic recession the novel coronavirus has caused.
As people lose their jobs, Cigna is seeing people drop out of its commercial plans, both for its health plan customers and its pharmacy benefit management customers. Medical costs related to COVID-19 are also expected to be high, Cordani said, though Cigna expects to see that offset partially by deferred elective services.
"We fully recognize this is a dynamic environment, but we expect the strength of our first quarter to drive us to another strong year for revenue, earnings and free cash flow," he said.
Cigna beat Wall Street projections for both earnings and revenue in the first quarter.
The insurer raked in $1.18 billion in profit for the quarter, according to its earnings release (PDF), and $38.5 billion in total revenue. Revenue topped performance in the first quarter of 2019, when Cigna earned $37.9 billion, while profits were down from $1.36 billion in the first quarter of 2019.
“Cigna entered 2020 with a long track record of growth, fueled by innovation and customer service," Cordani said in a statement. "We delivered first-quarter results that build on that foundation, and we remain confident in the strength of our four well-positioned growth platforms.”
It saw a significant revenue boost from its health services business line, which includes a number of its pharmacy services through Express Scripts, which earned $27.2 billion in revenue compared to $22.5 billion in the first quarter of 2019.
Express Scripts' pharmacy benefit management membership added 2.9 million customers in the first quarter, bringing its total membership to 78.8 million.
Medical membership reached 17.2 million, an increase of 73,000 people so far this year and 225,000 more than in the first quarter of 2019, driven largely by growth in Medicare Advantage.
Cigna projects full-year revenue of between $154 billion and $156 billion and earnings per share between $18 and $18.60.