Cigna's first quarter profit rose 52 percent, while Humana increased its profit 22 percent. Both insurers, like their competitors, benefited from a growth in enrollment and revenue and patients' moderate use of medical services. The results cap a first quarter earnings season in which the major managed-care players exceeded Wall Street views and raised forecasts.
Cigna earned $429 million, or $1.57 per share, in the first quarter, which is up from the $283 million, or $1.02 per share, last year. Revenue climbed 4 percent to $5.41 billion from $5.21 billion, according to the Wall Street Journal.
Although analysts called Cigna's results strong, some question whether the insurer is aggressively pricing its health plans to win business, the WSJ notes. Citigroup analyst Carl McDonald, for example, said that "the better-than-expected enrollment won't help tamp down speculation that pricing has become more aggressive."
"Our intent is not to be all things to all people," Cigna CEO David Cordani said. "Rather, we will seek to meet individuals' changing needs by going deep in targeted geographies and market segments and by leveraging our growing global capabilities," according to the Hartford Courant.
Humana's net income for the first quarter totaled $315.2 million, or $1.86 cents per share, compared to $258.8 million, or $1.52 per share, a year ago. Revenue totaled nearly $9.2 billion, reports the Associated Press.
"No company of our scale and our sector has developed individual relationships to the extent we have. Two-thirds of our revenues are in the individual space," Humana CEO Mike McAllister said, adding that Humana is "well-positioned in a post-reform environment, where traditional group health insurance faces numerous challenges."