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What changed in Cigna's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cigna's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+512 added−570 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Cigna's 2025 10-K

512 paragraphs added · 570 removed · 424 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

144 edited+49 added−59 removed74 unchanged
Biggest changeFederal Government agencies, under a number of contracts, were approximately 11%, 15% and 14% of consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively. These amounts were reported in the Evernorth Health Services and Cigna Healthcare segments. • The Company does not rely on business from one or a few brokers or agents.
Biggest changeThese amounts were reported in the Evernorth Health Services segment. • Revenues from U.S. Federal Government agencies, under a number of contracts, were 11% and 15% of total revenue from external customers for the years ended December 31, 2024 and 2023, respectively.
Privacy, Security and Data Standards Regulations On the federal level, we are subject to a number of sector-specific regulations related to the creation, collection, dissemination, receipt, maintenance, protection, use, transmission, disclosure, privacy, confidentiality, security, availability, integrity, processing and disposal of protected health information ("PHI") and other personally identifiable information ("PII").
Privacy, Security and Data Standards Regulations On the federal level, we are subject to a number of sector-specific regulations related to the creation, collection, dissemination, receipt, maintenance, protection, use, transmission, disclosure, privacy, confidentiality, security, availability, integrity, disposal and other processing of protected health information ("PHI") and other personally identifiable information ("PII").
For example, the Transparency in Coverage rule issued by the HHS, the DOL and the Department of the Treasury now requires most group health plans and health insurance issuers in the individual and group markets to publicly disclose price and cost-sharing information for all items and services to participants and enrollees.
For example, the Transparency in Coverage rule issued by HHS, the DOL and the Department of the Treasury now requires most group health plans and health insurance issuers in the individual and group markets to publicly disclose price and cost-sharing information for all items and services to participants and enrollees.
Healthcare Benefits and Solutions The following benefits and solutions are offered nationwide with various funding solutions to enhance the benefits from our health care medical plans. • Behavioral Health solutions consist of a broad national network of providers, including one of the largest virtual networks in the United States, specialty case and utilization management, a 24/7-accessible crisis intervention phone line, employee assistance programs, and work/life programs. • Consumer Health Engagement solutions include an array of health management, disease management and wellness programs to improve customers' health and well-being. • Cost Containment Programs are designed to reduce the cost of covered health care services and supplies by reducing out-of-network costs, protecting customers from balance billing and educating customers regarding the availability of lower cost in-network services.
Healthcare Benefits and Solutions The following benefits and solutions are offered nationwide with various funding options to enhance the benefits from our health care medical plans. • Behavioral Health solutions consist of a broad national network of providers, including one of the largest virtual networks in the United States; specialty case and utilization management; a 24/7-accessible crisis intervention phone line; employee assistance programs; and work/life programs. • Consumer Health Engagement solutions include an array of health management, disease management and wellness programs to improve customers' health and well-being. • Cost Containment Programs are designed to reduce the cost of covered health care services and supplies by reducing out-of-network costs, protecting customers from balance billing and educating customers regarding the availability of lower cost in-network services.
These medications broadly include those with frequent dosing adjustments, intensive clinical monitoring, the need for customer training, specialized product administration requirements or medications limited to certain specialty pharmacy networks by manufacturers. The front-end of our pharmacy, anchored by Accredo by Evernorth ® ("Accredo"), is organized into Therapeutic Resource Centers, where pharmacists focus their practice of pharmacy by condition.
These medications broadly include those with frequent dosing adjustments, intensive clinical monitoring, the need for customer training, specialized product administration requirements or medications limited to certain specialty pharmacy networks by manufacturers. The front-end of our pharmacy, anchored by Accredo ® Specialty Pharmacy ("Accredo"), is organized into Therapeutic Resource Centers, where pharmacists focus their practice of pharmacy by condition.
In addition, we are subject to similar regulations in non-U.S. jurisdictions in which we operate. Corporate Practice of Medicine and Other Laws Many states in which our subsidiaries operate limit the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals, and business corporations generally may not exercise control over the medical decisions of physicians.
In addition, we are subject to similar regulations in non-U.S. jurisdictions in which we operate. 16 Corporate Practice of Medicine and Other Laws Many states in which our subsidiaries operate limit the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals, and business corporations generally may not exercise control over the medical decisions of physicians.
We participate in various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals or formulary rebates with pharmaceutical manufacturers on behalf of their participants. ◦ Value-Based Programs. We offer a variety of solutions aimed at helping clients reduce costs and enhance clinical outcomes.
We participate in various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals or formulary rebates with pharmaceutical manufacturers on behalf of their participants. 3 ◦ Value-Based Programs. We offer a variety of solutions aimed at helping clients reduce costs and enhance clinical outcomes.
Data and Analytics. We conduct timely, rigorous and objective research and analysis that informs evidence-based medical and pharmacy benefit management decisions and evaluates the clinical, economic and individual impact of enhanced benefit designs and programs, ultimately resulting in rich, integrated data that helps to provide differentiated outcomes.
We conduct timely, rigorous and objective research and analysis that informs evidence-based medical and pharmacy benefit management decisions and evaluates the clinical, economic and individual impact of enhanced benefit designs and programs, ultimately resulting in rich, integrated data that helps to provide differentiated outcomes.
States have begun to enact laws exempting certain providers from pre-authorization requirements of insurers; laws standardizing the process for, and restricting the use of, utilization management rules; and laws shortening the time 18 frames within which prescription drug prior authorization determinations must be made.
States have begun to enact laws exempting certain providers from pre-authorization requirements of insurers; laws standardizing the process for, and restricting the use of, utilization management rules; and laws shortening the time frames within which prescription drug prior authorization determinations must be made.
Additionally, under Section 5 of the Federal Trade Commission Act ("FTC Act"), the FTC has jurisdiction over certain privacy and security practices deemed unfair and deceptive acts and practices in or affecting commerce, which includes unfair and deceptive practices with respect to consumer privacy rights and safeguarding of PHI and PII.
Under Section 5 of the Federal Trade Commission Act ("FTC Act"), the FTC has jurisdiction over certain privacy and security practices deemed unfair and deceptive acts and practices in or affecting commerce, which includes unfair and deceptive practices with respect to consumer privacy rights and safeguarding of PHI and PII.
Our digital strategy focuses on the drive from analog to digital, which complements the growth strategy of The Cigna Group, creates efficiency and amplifies the value of existing offerings, as well as creates option value with industry-leading personalization and precision to drive better health and business outcomes.
Our digital strategy also focuses on the drive from analog to digital, which complements the growth strategy of The Cigna Group, creates efficiency and amplifies the value of existing offerings, as well as creates option value with industry-leading personalization and precision to drive better health and business outcomes.
The four pillars of this framework are as follows: 11 Healthy Society. We are committed to understanding and addressing social determinants of health and improving medical quality and access while lowering health risks, promoting preventive health interventions and coordinating all aspects of care.
The four pillars of this framework are as follows: Healthy Society. We are committed to understanding and addressing social determinants of health and improving medical quality and access while lowering health risks, promoting preventive health interventions and coordinating all aspects of care.
Additionally, the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, recently established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn about, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.
Additionally, the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn about, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.
Certain insurance and HMO subsidiaries are required to file an annual report of internal control over financial reporting with 17 most jurisdictions in which they do business. Insurance and HMO subsidiaries' operations and financial statements are subject to examination by regulators.
Certain insurance and HMO subsidiaries are required to file an annual report of internal control over financial reporting with most jurisdictions in which they do business. Insurance and HMO subsidiaries' operations and financial statements are subject to examination by regulators.
EVERNORTH HEALTH SERVICES Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live richer, healthier lives.
EVERNORTH HEALTH SERVICES Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.
Evernorth Health Services uses one wholesaler for approximately half of our pharmaceutical purchases, but holds contracts with other wholesalers if needs for an alternate source arise. Generic pharmaceuticals are generally purchased directly from manufacturers. CIGNA HEALTHCARE Cigna Healthcare includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical plan services and coordinated solutions to clients and customers.
Evernorth Health Services uses one wholesaler for approximately half of our pharmaceutical purchases, but holds contracts with other wholesalers if needs for an alternate source arise. Generic pharmaceuticals are generally purchased directly from manufacturers. CIGNA HEALTHCARE Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S.
In addition, we are or may become subject to international laws, rules and regulations governing privacy, data protection, information security, AI and wider data regulation, such as the European Union's General Data Protection Regulation ("GDPR"), Artificial Intelligence Act and Digital Operational Resilience Act, which can be more stringent than those in the United States.
In addition, we are or may become subject to international laws, rules and regulations governing privacy, data protection, information security, AI and wider data regulation, such as the European Union's General Data Protection Regulation ("GDPR"), the European Union Artificial Intelligence Act (the "EU AI Act"), and the Digital Operational Resilience Act, which can be more stringent than those in the United States.
Competition The primary competitive factors in the industry include the ability to negotiate with retail pharmacies to ensure retail pharmacy networks meet the needs of clients and customers; provide home delivery and specialty pharmacy services; negotiate pricing of 4 prescription drugs with drug manufacturers; manage cost and quality of specialty drugs; specialize in claim adjudication and benefit administration; improve access, outcomes, and efficiencies within the health care ecosystem; deliver quality primary and behavioral care in virtual-led hybrid settings, in the workplace and in home-based settings; navigate the complexities of government-reimbursed business including Medicare, Medicaid and the public exchanges; and use the information obtained about drug, behavioral and medical utilization patterns and consumer behavior to reduce costs for clients and customers and assess the level of service provided.
Competition The primary competitive factors in the industry include the ability to negotiate with retail pharmacies to ensure retail pharmacy networks meet the needs of clients and customers; provide home delivery and specialty pharmacy services; negotiate with drug manufacturers to lower the cost of prescription drugs; manage cost and quality of specialty drugs; specialize in claim adjudication and benefit administration; improve access, outcomes, and efficiencies within the health care ecosystem; deliver quality primary and behavioral care in virtual-led hybrid settings and in the workplace; navigate the complexities of government-reimbursed business including Medicare, Medicaid and the public exchanges; and use the information obtained about drug, behavioral and medical utilization patterns and consumer behavior to reduce costs for clients and customers and assess the level of service provided.
Evernorth Health Services offers a full suite of products and services that both (a) enables our customers to combine our products and services to create a comprehensive benefit offering designed to manage prescription drugs and provide independent and coordinated health solutions and capabilities and (b) addresses the needs of a shared customer base across both operating segments of Evernorth Health Services.
Evernorth Health Services offers a full suite of products and services that both (a) enables our clients to combine our products and services to create a comprehensive benefit offering designed to manage prescription drugs and provide independent and coordinated health solutions and capabilities and (b) addresses the needs of a shared customer base across both operating segments of Evernorth Health Services.
Our Express Scripts Pharmacy by Evernorth ® ("Express Scripts Pharmacy") offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home and allows for automatic refills on eligible medications and unrestricted telephone access to customer care advocates and specially trained pharmacists.
Our Express Scripts ® Pharmacy offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home and allows for automatic refills on eligible medications and unrestricted telephone access to customer care advocates and specially trained pharmacists.
Other U.S. federal and state consumer privacy laws typically exempt data and/or entities subject to HIPAA, but several states, such as Washington, Nevada and Connecticut, have recently enacted privacy laws to protect consumer health data and require consent for the collection, use and sharing of consumer health data.
Other U.S. federal and state consumer privacy laws typically exempt data and/or entities subject to HIPAA, but several states, such as Washington, Nevada and Connecticut, have enacted privacy laws to protect consumer health data and require consent for the collection, use, sharing and other processing of consumer health data.
Customers include employers and individuals located in specific geographies (China, Singapore, Hong Kong, Spain and India, along with various countries in the Middle East) where the products and services are purchased. Offerings include ASO, GC and ER funding solutions. 6 Premiums and Fees • ASO.
Customers include employers and individuals located in specific geographies (China, Singapore, Hong Kong, Spain and India, along with various countries in the Middle East) where the products and services are purchased. Offerings include ASO, GC and ER funding options. 6 Premiums and Fees • ASO.
Pharmacy Regulation We are licensed to do business as a pharmacy in the states in which our pharmacies are located, and the health care professionals who we employ are also licensed by, and subject to, the laws and regulations of state boards of pharmacy and other governmental authorities.
Pharmacy and Pharmaceutical Distribution Regulation We are licensed to do business as a pharmacy in the states in which our pharmacies are located, and the health care professionals who we employ are also licensed by, and subject to the laws and regulations of, state boards of pharmacy and other governmental authorities.
We provide distribution services primarily to health care providers who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals. This business operates three distribution centers and ships most products overnight within the United States.
We provide distribution services primarily to health care providers who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals. This business operates four distribution centers and ships most products overnight within the United States.
Clients may also choose to enroll in programs that result in communications about potential therapy concerns being sent to prescribers after the initial claim submission. ◦ Drug Formulary Management. ▪ Formularies are lists of drugs with designations that may be used to determine drug coverage and customer out-of-pocket costs as well as communicate plan preferences in competitive drug categories.
Clients may also choose to enroll in programs that result in communications about potential therapy concerns being sent to prescribers after the initial claim submission. ◦ Drug Formulary Management. ▪ Formularies are lists of drugs with designations that may be used to determine one component of drug coverage and customer out-of-pocket costs as well as communicate plan preferences in competitive therapeutic drug categories.
We drive action through this framework to deliver on our purpose and performance vision: to transform the ecosystem of health into one that is well-functioning, sustainable, accessible and equitable - advancing better health for all. Our commitment to this vision guides us in our multidimensional value-creation strategy as we strive to meet the needs of our many stakeholders.
We drive action through this framework to deliver on our vision: to transform the ecosystem of health into one that is well-functioning, sustainable, accessible and equitable - advancing better health for all. Our commitment to this vision guides us in our value-creation strategy as we strive to meet the needs of our many stakeholders.
Evernorth Health Services, through our Pharmacy Benefit Services and Specialty and Care Services operating segments, provides independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live richer, healthier lives.
The Evernorth Health Services segment, through our Pharmacy Benefit Services and Specialty and Care Services operating segments, provides independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.
It is a contracted supplier with most major group purchasing organizations and leverages its distribution platform to operate as a third-party logistics provider for several pharmaceutical companies. • Care Services.
It is a contracted supplier with most major group purchasing organizations and leverages its distribution platform to operate as a third-party logistics provider for certain pharmaceutical companies. • Care Services.
Products and services are offered worldwide except as limited by applicable law and include ASO, GC and ER funding solutions. • Local Health Care offerings include medical, dental, pharmacy and vision as well as life coverage.
Products and services are offered worldwide except as limited by applicable law and include ASO, GC and ER funding options. • Local Health Care offerings include medical, dental, pharmacy and vision as well as life coverage.
Our EMG team oversees the development, deployment and monitoring of AI models - driven by our Responsible AI Principles: validity and reliability; safety; privacy; fairness; transparency; and accountability. EMG is governed by the EMG Board, comprised of senior leaders from across the company, with representation from business, clinical, privacy, legal, internal audit, information protection and other departments.
Our EMG team oversees the development, deployment and monitoring of AI models driven by our Responsible AI Principles: validity and reliability, safety, privacy, fairness, transparency, and accountability. EMG is governed by the EMG Board, consisting of senior 9 leaders from across the company, with representation from business, clinical, privacy, legal, internal audit, information protection and other departments.
We believe that employers play a vital role in the health care system, and we strive to be a model for others by prioritizing and investing in the health and vitality of employees within our own company. We aim to cultivate a purpose- and performance-driven workforce that is equipped and empowered to drive growth and innovation across our diverse businesses.
We believe that employers play a vital role in the health care system, and we strive to be a model for others by prioritizing and investing in the health and vitality of employees within our own company. We aim to cultivate a workforce that is equipped and empowered to drive growth and innovation across our diverse businesses.
Our formulary management services support clients in establishing formularies that assist customers and physicians in choosing clinically appropriate, cost-effective drugs and prioritize access, safety and affordability. ▪ We administer specific formularies for our clients, including standard formularies developed by Express Scripts by Evernorth ® ("Express Scripts") and custom formularies in which we play a more limited role.
Our formulary management services support clients in establishing formularies that assist customers and physicians in choosing clinically appropriate, cost-effective drugs and prioritize access, safety and affordability. ▪ We administer specific formularies for our clients, including standard formularies developed by Express Scripts ® Pharmacy Benefit Services ("Express Scripts") and custom formularies in which we play a more limited role.
Our ability to deliver this broad array of health care services on both a standalone or combined basis between its two operating segments enables us to drive incremental growth.
Our ability to deliver this broad array of health care services on either a standalone or combined basis between its two operating segments enables us to drive incremental growth.
As the model law is intended to serve as model legislation only, states will need to enact legislation for the model law to become mandatory and enforceable. To date, 21 states have enacted some form of the model law.
As the model law is intended to serve as model legislation only, states will need to enact legislation for the model law to become mandatory and enforceable. To date, 28 states have enacted some form of the model law.
Item 1. BUSINESS OVERVIEW The Cigna Group SM , together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company. Our Purpose and Mission The Cigna Group is a global health company committed to creating a better future for every individual and every community.
Item 1. BUSINESS OVERVIEW The Cigna Group ® , together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company. Our Focused Mission The Cigna Group is a global health company committed to creating a better future for every individual and every community.
The Cybersecurity Information Sharing Act of 2015 encouraged organizations to share cyber threat indicators with the federal government and, among other things, directed HHS to develop a set of voluntary cybersecurity best practices for organizations in the health care industry. States have also begun to issue regulations specifically related to cybersecurity, which may differ or conflict from state to state.
The Cybersecurity Information Sharing Act of 2015 encouraged organizations to share cyber threat indicators with the federal government and, among other things, directed HHS to develop a set of voluntary cybersecurity best practices for organizations in the health care industry. States have issued regulations specifically related to cybersecurity, which may differ or conflict from state to state.
Accredo provides support for customers through our specially trained clinicians, network of in-home nursing services, nationwide footprint, drug reimbursement services and highly tailored clinical care programs. Our Specialty Pharmacy operations consist of 35 licensed pharmacies. • Specialty Distribution.
Accredo provides support for customers through our specially trained clinicians, network of in-home nursing services, nationwide footprint, drug reimbursement services and highly tailored clinical care programs. Our Specialty Pharmacy operations consist of 35 licensed pharmacies. • Health System Services.
Health savings accounts, health reimbursement accounts and flexible spending accounts encourage customers to play an active role in managing their health and health care costs. 5 • Individual and Family Plans ("IFPs") are Patient Protection and Affordable Care Act ("ACA") compliant exclusive provider organizations ("EPOs") or HMO plans marketed to individuals under age 65 without access to health care coverage through an employer or government program such as Medicare or Medicaid.
Health Savings Accounts, Health Reimbursement Accounts and Flexible Spending Accounts encourage customers to play an active role in managing their health and health care costs. • Individual and Family Plans ("IFP") are Patient Protection and Affordable Care Act and related amendments ("ACA") compliant exclusive provider organizations ("EPOs") or HMO plans marketed to individuals under age 65 without access to health care coverage through an employer or government program such as Medicare or Medicaid.
Information about Segments We present the financial results of our businesses in the following segments (see "Executive Overview" section of Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a financial summary): Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live richer, healthier lives. 1 Cigna Healthcare includes the U.S.
Information about Segments We present the financial results of our businesses in the following segments (see the "Executive Overview" section of Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a financial summary): Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.
Our operations are also subject to nonroutine examinations, audits and investigations by various state and federal regulatory agencies, generally as the result of a complaint. In addition, we may be implicated in investigations of our clients whose group benefit plans we administer on their behalf.
Our operations are also subject to nonroutine examinations, audits and investigations by various state and federal regulatory agencies, generally as the result of a complaint. In addition, we may be subject to examination or investigation of our clients whose group benefit plans we administer on their behalf.
State Departments of Insurance and other state government agencies and legislatures are increasingly aware and active in providing guidance in the AI space.
State Departments of Insurance, state attorneys general, and other state government agencies and legislatures are increasingly aware and active in providing guidance in the AI space.
CuraScript SD by Evernorth ® is a specialty distributor of pharmaceuticals and medical supplies (including injectable and infusible pharmaceuticals and medications to treat specialty and rare or orphan diseases) directly to health care providers, clinics and hospitals in the United States for office or clinic administration.
Health System Services includes CuraScript SD by Evernorth ® , which is a specialty distributor of pharmaceuticals and medical supplies (including injectable and infusible pharmaceuticals and medications to treat specialty and rare or orphan diseases) directly to health care providers, including clinics and hospitals in the United States for office or clinic administration.
We offer clinical programs to help our clients, including third-party administrators, drive better whole-person health outcomes through our Care Delivery (MD Live by Evernorth ® ("MD Live") virtual care, in-home care and physical primary care) and Care Management (EviCore by Evernorth ® ("EviCore"), benefits management, behavioral health services, network services and health coaching capabilities) offerings.
We offer clinical programs to help our clients, including third-party administrators, drive better whole-person health outcomes through our Care Delivery (MD Live by Evernorth ® ("MD Live") virtual care) and Care Management (EviCore by Evernorth ® ("EviCore") benefits management, behavioral health services, network services and health coaching capabilities) offerings.
In addition to the FTC Act, the FTC also enforces other federal laws relating to consumers' privacy and security. The FTC has also been active with respect to companies' use of big data and AI, specifically ensuring fair and equitable use of these tools, and the FTC has named AI as an area of enforcement focus.
In addition to the FTC Act, the FTC also enforces other federal laws relating to consumers' privacy and security. The FTC has also been active with respect to companies' use of data and AI, specifically ensuring fair and equitable use of these tools, and AI remains an FTC area of enforcement focus.
Evernorth Health Services has three clients that each drive significant revenues for the segment: • Express Scripts and Centene Corporation ("Centene") have a multi-year agreement, which began January 1, 2024, to manage pharmacy benefit services for Centene's customers, providing them with access to the extensive Express Scripts national network of retail pharmacies. • Express Scripts and Prime Therapeutics LLC ("Prime") have an agreement to deliver improved choice and affordability for Prime's clients and customers by enhancing retail pharmacy networks, providing access to Accredo and Express Scripts Pharmacy, and providing pharmaceutical manufacturer value. • The Department of Defense ("DoD") TRICARE ® is the military health care program available to active-duty service members, active-duty family members, National Guard and Reserve members and their family members, retirees and retiree family members, survivors and certain former spouses.
Evernorth Health Services has three clients that each drive significant revenues for the segment: • Express Scripts and Centene Corporation ("Centene") have a multiyear agreement, which began January 1, 2024, to manage pharmacy benefit services for Centene's customers, providing them with access to the extensive Express Scripts national network of retail pharmacies. 4 • Express Scripts and Prime Therapeutics LLC ("Prime") have agreements to deliver improved choice and affordability for Prime's clients and customers by enhancing retail pharmacy networks, providing access to Accredo and Express Scripts Pharmacy, and providing pharmaceutical manufacturer value. • The Department of War (previously the Department of Defense) TRICARE ® is the military health care program available to active-duty service members, active-duty family members, National Guard and Reserve members and their family members, retirees and retiree family members, survivors and certain former spouses.
Evernorth Wholesale Marketplace ® offers a suite of flexible, private label pharmacy benefit manager solutions including but not limited to a pharmacy rebate program, a retail network program, value-based solutions, a medical rebate program and utilization management policies. These offerings are captured under either our drug formulary administrative service arrangements or our formulary processing arrangements. • Home Delivery Pharmacy.
Evernorth Wholesale Marketplace ® offers a suite of flexible, private label pharmacy benefit manager solutions including but not limited to a pharmacy rebate program, a retail network program, value-based solutions, a medical rebate program and utilization management policies. These offerings are captured under either our drug formulary administrative service arrangements or our formulary processing arrangements. ◦ Transparent Rebate-free Model.
Departments of Labor ("DOL") and Treasury, the Office of Personnel Management ("OPM"), the Federal Trade Commission ("FTC"), the SEC, the Office of the National Coordinator for Health Information Technology, state departments of insurance and state boards of pharmacy.
Departments of Labor ("DOL") and Treasury, the Office of Personnel Management ("OPM"), the Defense Health Agency ("DHA"), the Federal Trade Commission ("FTC"), the SEC, the Office of the National Coordinator for Health Information Technology, state departments of insurance, state boards of health and state boards of pharmacy.
Additionally, many Evernorth Health Services offerings are available within Cigna Healthcare solutions to drive cross-enterprise leverage. 2 How We Deliver • Deep clinical expertise in evaluating medicines, digital therapeutics and other health solutions for efficacy and value to assist clients in selecting a cost-effective formulary as well as in leveraging evidence-based guidelines to ensure patients receive the most medically appropriate treatments. • Affordable solutions that provide more value and align incentives between the patient, health care professional and plan sponsor. • Modular portfolio tailored to client needs, using the combined strengths and capabilities of Evernorth Health Services, as well as strategic partnerships, to deliver better, more efficient care for patients; better experiences for clients, providers and customers; and enhanced choices for clients and customers through our open architecture model. • Talented, experienced and caring people who operate in a culture of innovation and partnership to solve complex problems across a fragmented health care ecosystem, fueled by data and expertise that drives purposeful innovation.
Additionally, many Evernorth Health Services offerings are available within Cigna Healthcare solutions. 2 How We Deliver • Deep clinical expertise in evaluating medicines, digital therapeutics and other health solutions for efficacy and value to assist clients in selecting a cost-effective formulary as well as in leveraging evidence-based guidelines to ensure patients receive the most medically appropriate treatments. • Affordable solutions that provide more value and align incentives between the patient, health care professional and plan sponsor. • Modular portfolio tailored to client needs, using the combined strengths and capabilities of Evernorth Health Services, as well as strategic partnerships, to deliver better, more efficient care for patients; better experiences for clients, providers and customers; and enhanced choices for clients and customers through our open architecture model. • Talented, experienced and caring people who operate in a culture of innovation and partnership to solve complex problems across a fragmented health care ecosystem, fueled by data and expertise that drives purposeful innovation. • Commitment to improving the health care experience for patients and physicians through easier access to care, better support, better value, accountability and transparency.
The principal products of the corporate-owned life insurance ("COLI") business are permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for financing employer-paid future benefit obligations. Permanent life insurance provides coverage that, when adequately funded, does not expire after a term of years. The contracts are primarily nonparticipating universal life policies.
Continuing Business Corporate-Owned Life Insurance. The principal products of the corporate-owned life insurance ("COLI") business are permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for financing employer-paid future benefit obligations. Permanent life insurance provides coverage that, when adequately funded, does not expire after a term of years.
The ACA imposed, among other things, certain assessments on health insurers, created health insurance exchanges for individuals and small group employers to purchase insurance coverage, and implemented minimum MLRs for our Cigna Healthcare business. The ACA allows states to adopt MLR requirements that are more stringent than those established by the ACA.
The ACA, among other things, created health insurance exchanges for individuals and small group employers to purchase insurance coverage and implemented minimum MLRs for our Cigna Healthcare business. The ACA allows states to adopt MLR requirements that are more stringent than those established by the ACA.
We retain any margin if costs are less than the premium charged (subject to minimum medical loss ratio ("MLR") rebate requirements) and bear the risk for costs in excess of the premium charged. Medicare Advantage (held for sale).
We retain any margin if costs are less than the premium charged (subject to minimum medical loss ratio ("MLR") rebate requirements) and bear the risk for costs in excess of the premium charged.
Healthcare and International Health operating segments, which provide comprehensive medical plan services and coordinated solutions to clients and customers. Other Operations comprises the remainder of our business operations, which includes certain continuing, run-off and other non-strategic businesses.
Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. Other Operations comprises the remainder of our business operations, which includes certain continuing, run-off and other non-strategic businesses.
An increase in the number of prescriptions filled at retail pharmacies may have a negative impact on the number of prescriptions filled through home delivery. 16 Pharmacy Benefit Manager and Drug Pricing Regulation Our pharmacy benefit management services are subject to numerous laws and regulations that govern, and proposed legislation and regulations that may govern, critical practices, including disclosure, receipt and retention of rebates and other payments received from pharmaceutical manufacturers; certain pharmacy contracting practices, including disclosure of cost information to customers; pharmacy reimbursement mandates; the receipt and retention of transmission fees from contracted pharmacies; performance-based price concessions; pharmacy price concessions to drug prices at the point of sale; audits of contracted pharmacies; use of, administration of or changes to drug formularies, the use and disclosure of maximum allowable cost ("MAC") pricing, or clinical programs; "most favored nation" pricing, which provides that a pharmacy participating in a specific government program must give the program the best price the pharmacy makes available to any third-party plan; disclosure of data to third parties; drug utilization management practices; the level of duty a pharmacy benefit manager owes its clients or customers; configuration of pharmacy networks; the operations of our subsidiary pharmacies; referrals to affiliated pharmacies; disclosure of negotiated provider reimbursement rates; disclosure of negotiated drug rebates; calculation of certain customer cost-share for prescription drug claims; pricing that includes differential or spread (i.e., a difference between the drug price charged to the plan sponsor by a pharmacy benefit manager and the price paid by the manager to the dispensing provider); disclosure of fees associated with administrative service agreements and patient care programs that are attributable to customers' drug utilization; utilization management; and registration or licensing of pharmacy benefit managers.
Pharmacy Benefit Manager and Drug Pricing Regulation Our pharmacy benefit management services are subject to numerous laws and regulations that govern critical practices, including disclosure, receipt and retention of rebates and other payments received from pharmaceutical manufacturers; certain pharmacy contracting practices, including disclosure of cost information to customers; pharmacy reimbursement mandates; the receipt and 13 retention of transmission fees from contracted pharmacies; performance-based price concessions; pharmacy price concessions to drug prices at the point of sale; audits of contracted pharmacies; use of, administration of or changes to drug formularies, the use and disclosure of maximum allowable cost ("MAC") pricing, or clinical programs; "most favored nation" pricing, which provides that a pharmacy participating in a specific government program must give the program the best price the pharmacy makes available to any third-party plan; disclosure of data to third parties; drug utilization management practices; the level of duty a PBM owes its clients or customers; configuration of pharmacy networks; the operations of our subsidiary pharmacies; fiduciary requirements; referrals to affiliated pharmacies; disclosure of negotiated provider reimbursement rates; disclosure of negotiated drug rebates; calculation of certain customer cost-share for prescription drug claims; pricing that includes differential or spread (i.e., a difference between the drug price charged to the plan sponsor by a PBM and the price paid by the manager to the dispensing provider); disclosure of fees associated with administrative service agreements and patient care programs that are attributable to customers' drug utilization; utilization management; and registration or licensing of PBMs.
In 2021, in response to the COVID-19 pandemic, the federal government temporarily expanded eligibility for ACA subsidies to higher-income people who did not otherwise qualify and increased ACA subsidies for lower-income people who already qualified in 2021 and 2022, among other actions.
In 2021, in response to the COVID-19 pandemic, the federal government temporarily expanded eligibility for ACA subsidies to higher-income people who did not otherwise qualify and increased ACA subsidies for lower-income people who already qualified in 2021 and 2022, among other actions. These ACA subsidies expired on December 31, 2025.
How We Deliver • Multifaceted approach to affordability with a focus on high-quality care to lower costs and drive better outcomes through deep collaborative partnerships with high-performing providers and superior clinical expertise and analytics to guide customers to the highest quality, most affordable sites of care. • Talented and experienced people who bring a highly consultative orientation to market and partner with clients to understand their business and goals to address the unique health needs of their population. • Modular portfolio of products, services and funding options that provides choice and enables us to build and tailor a unique combination to meet the specific needs of each client. • Partnering with Evernorth to drive cross-enterprise leverage to deliver a spectrum of integrated solutions that create value and savings for our customers, clients and partners.
How We Deliver • Multifaceted approach to affordability with a focus on high-quality care to lower costs and drive better outcomes through deep collaborative partnerships with high-performing providers and superior clinical expertise and analytics to guide customers to the highest quality, most affordable sites of care and reduce health care waste. • Talented and experienced people who bring a highly consultative orientation to market and partner with clients to understand their business and goals to address the unique health needs of their population. • Modular portfolio of products, services and funding options that provides choice and enables us to build and tailor a unique combination to meet the specific needs of each client. • Partnering with Evernorth to deliver a spectrum of integrated solutions that create value and savings for our customers, clients and provider partners. • Commitment to improving the health care experience for patients and physicians through easier access to care, better support, better value, accountability and transparency.
Government Procurement Regulations We have a contract with the U.S. DoD that subjects us to applicable Federal Acquisition Regulations ("FAR") and the DoD FAR Supplement, which govern federal government contracts. Further, there are other federal and state laws applicable to our DoD arrangement and our arrangements with other clients that may be subject to government procurement regulations.
As an example, we have a contract with the DHA that subjects us to applicable Federal Acquisition Regulations ("FAR") and the FAR Supplement, which govern federal government contracts. Further, there are other federal and state laws applicable to our DHA arrangement and our arrangements with other clients that may be subject to government procurement regulations.
ASO arrangements represent approximately 26% of segment revenues and 74% of Cigna Healthcare medical customers. • Insured. GC and ER. Individual and group insurance premium rates generally must be approved by the applicable state regulatory agency, and state or federal laws may restrict or limit the use of rating methods.
ASO arrangements represent approximately 32% of 2025 segment revenues and 79% of Cigna Healthcare medical customers as of December 31, 2025. • Insured. GC and ER. Individual and group insurance premium rates generally must be approved by the applicable state regulatory agency, and state or federal laws may restrict or limit the use of rating methods.
These programs include SafeGuardRx ® , Express Scripts Copay Assurance SM , Express Scripts Patient Assurance ® and Evernorth EncircleRx SM . 3 ◦ Evernorth Wholesale Marketplace.
These programs include SafeGuardRx ® , Express Scripts Patient Assurance ® , Evernorth EncircleRx SM and Evernorth EnReachRx SM . ◦ Evernorth Wholesale Marketplace.
Our products and our participation in government-sponsored health care programs are regulated by CMS, state Medicaid agencies, HHS-OIG, DOJ, and other federal and state agencies, and we are subject to risks associated with audits of our performance and audits to determine compliance with contracts and regulations.
Government-sponsored health care programs are regulated by HHS and its agencies such as CMS, state Medicaid agencies, the HHS-OIG, DOJ, and other federal and state agencies, and we are subject to risks associated with audits of our performance and audits to determine compliance with contracts and regulations.
Our U.S. network has approximately 1.8 million physicians, including specialists, and over 6,000 hospitals. We have strategic alliances with several regional managed care organizations to gain access to their provider networks and discounts. • Network Strength and Stability.
As of December 31, 2025, our U.S. network had approximately 1.7 million physicians, including specialists, and over 6,000 hospitals. We have strategic alliances with several regional managed care organizations to gain access to their provider networks and discounts. • Network Strength and Stability.
The federal government has also enacted final regulations on interoperability and information blocking to support the seamless and secure access, exchange and use of electronic health information by and between patients, enrollees and entities, such as payors and health care providers.
These laws and others may impact our businesses and practices. 14 The federal government has also enacted final regulations on interoperability and information blocking to support the seamless and secure access, exchange and use of electronic health information by and between patients, enrollees and entities, such as payors and health care providers.
Our pharmacy technology platform allows us to safely, rapidly and accurately adjudicate over two billion adjusted prescriptions annually. Our technology helps retail pharmacies focus on patient care, and our real-time safety checks help avoid medication errors. The Cigna Group companies hold over 480 U.S. patents.
We believe we have substantial capacity for growth in our U.S. pharmacy claims processing facilities. Our pharmacy technology platform allows us to safely, rapidly and accurately adjudicate over two billion adjusted prescriptions annually. Our technology helps retail pharmacies focus on patient care, and our real-time safety checks help avoid medication errors. The Cigna Group companies hold over 540 U.S. patents.
We use these patents to protect our proprietary technological advances and to differentiate ourselves in the market. We are not substantially dependent on any single patent or group of related patents.
We use these patents to protect our proprietary technological advances and to differentiate ourselves in the market. We are not substantially dependent on any single patent or group of related patents. We are not aware of any facts that could materially impact the continuing use of our intellectual property.
We make annual, quarterly and current reports and proxy statements and amendments to those reports available, free of charge, through our website as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the Securities and Exchange Commission ("SEC").
You can access our website at http://www.thecignagroup.com to learn more about our company. We make annual, quarterly and current reports and proxy statements and amendments to those reports available, free of charge, through our website as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the Securities and Exchange Commission ("SEC").
Our reinsurance operations are an inactive business in run-off. In February 2013, we effectively exited the variable annuity reinsurance business by reinsuring 100% of our future exposures, net of retrocessional arrangements in place at that time, up to a specified limit.
Non-guaranteed payments are contingent on the survival of one or more parties involved in the settlement. Reinsurance. Our reinsurance operations are an inactive business in run-off. In February 2013, we effectively exited the variable annuity reinsurance business by reinsuring 100% of our future exposures, net of retrocessional arrangements in place at that time, up to a specified limit.
These include compliance with the Privacy Act of 1974, the Defense Federal Acquisition Regulation Supplement cybersecurity requirements, the Cybersecurity Maturity Model Certification (going into effect over the next four years and based on the National Institute of Standards and Technology ("NIST") standards), the Federal Information Security Modernization Act and the White House's 2021 Executive Order on Improving the Nation's Cybersecurity.
These include compliance with the Privacy Act of 1974, the Defense Federal Acquisition Regulation Supplement cybersecurity requirements, the Cybersecurity Maturity Model Certification (phasing in between November 2025 and November 2028 and based on the National Institute of Standards and Technology ("NIST") standards), the Federal Information Security Modernization Act, and the White House's 2021 Executive Order on Improving the Nation's Cybersecurity.
We partner with select private exchanges that provide employees of participating clients access to health insurance, targeting participation to those models that best align with our mission and value proposition. • Public Exchanges. Cigna Healthcare offers individual ACA-compliant policies through public health insurance exchanges in select geographies.
We partner with select private exchanges that provide employees of participating clients access to health insurance, targeting participation to those models that best align with our mission and value proposition. • Public Exchanges.
We also provide Medicare Part D-related products and services to other Medicare Part D sponsors, Medicare Advantage Prescription Drug Plans, and employers and clients offering Medicare Part D benefits to Medicare Part D eligible beneficiaries, including those dually eligible for Medicare and Medicaid benefits ("dual-eligible").
Medicare and Medicaid Regulations Through our subsidiaries, we provide services to Medicare Part D plan sponsors, Medicare Advantage Prescription Drug Plans, and employers and clients offering Medicare Part D benefits to Medicare Part D eligible beneficiaries, including those dually eligible for Medicare and Medicaid benefits ("dual-eligible").
Guaranty Associations, Indemnity Funds, Risk Pools and Administrative Funds Most states and certain non-U.S. jurisdictions require insurance companies to support guaranty associations or indemnity funds that are established to pay claims on behalf of insolvent insurance companies. Some states have similar laws relating to HMOs and other payors, such as consumer operated and oriented plans (co-ops) established under the ACA.
Guaranty Associations, Indemnity Funds, Risk Pools and Administrative Funds Most states and certain non-U.S. jurisdictions require insurance companies to support guaranty associations or indemnity funds that are established to pay claims on behalf of insolvent insurance companies. Some states have similar laws relating to HMOs.
We drive progress by aligning our products and services with value-based care models, leveraging integrated benefits, managing drug costs through innovation, expanding digital offerings and reviewing coverage policies for health equity. Healthy Workforce.
We drive progress by aligning our products and services with value-based care models, leveraging integrated benefits, managing drug costs through innovation, expanding digital offerings and reviewing coverage policies for health equity. We also give back through charitable giving and volunteerism in communities where we operate around the world. Healthy Workforce.
We offer administrative services only ("ASO") and insurance funding solutions to employers, groups and individuals along with other health care benefits and solutions to improve the quality of care, lower costs and help customers achieve better health outcomes. Funding solutions, referring to the entity assuming financial risk, are described in the Premiums and Fees section below.
We offer administrative services only ("ASO") and insurance funding options to employers, groups and individuals along with other health care benefits and solutions to improve the quality of care, lower costs and help customers achieve better health outcomes.
We do not view AI as a replacement for expert decisions made by physicians or employees at The Cigna Group. Given this, we consider most of the AI models we use as augmented intelligence, providing information to human experts for further consideration, in combination with many other factors evaluated in care and benefit administration decisions.
Given this, we consider most of the AI models we use as augmented intelligence, providing information to human experts for further consideration, in combination with many other factors evaluated in care and benefit administration decisions.
CMS and some states have issued laws, guidance and regulations that impose restrictions that generate additional costs and limit our ability to maximize efficiencies, such as those that could otherwise be gained through certain prescription and refill processes. Some states mandate or have proposed to mandate coverage of certain benefits, conditions and U.S.
Similarly, the federal government and some states have issued laws, regulations and guidance that impose restrictions and generate additional costs by limiting our ability to maximize efficiencies that could otherwise be gained through certain prescription and refill processes or by imposing mandated coverage of certain benefits, conditions or U.S.
Our ability to obtain payment (and the determination of the amount of such payments), market to, enroll and retain customers, and expand into new service areas is subject to compliance with CMS' numerous and complex regulations and requirements that are subject to administrative discretion, review and enforcement.
A company's ability to obtain payment (and the determination of the amount of such payments) and retain business is subject to compliance with CMS' numerous and complex regulations and requirements that are subject to administrative discretion, review and enforcement.
There can be no assurance that we will not be the subject of an investigation, 14 audit or compliance review regarding our compliance with HIPAA.
We may also be held liable under HIPAA for violations by our vendors. There can be no assurance that we will not be the subject of an investigation, audit or compliance review regarding our compliance with HIPAA.
Employers, TPAs, union-sponsored benefit plans, government health programs and other groups. • Customers. Individuals who access our offerings through an employer-sponsored plan, government-sponsored plan, individual plan or other insured group. Primary Distribution Channels • Brokers and Consultants. Sales representatives distribute our products and solutions to a broad group of brokerage and consulting firms as well as individuals. 7 • Direct.
Individuals who access our offerings through an employer-sponsored plan, government-sponsored plan in Medicare Advantage prior to the HCSC transaction, IFP or other individual plan, or other insured group. Primary Distribution Channels • Brokers and Consultants. Sales representatives distribute our products and solutions through a broad group of brokerage and consulting firms as well as individuals. • Direct.
We routinely monitor and evaluate the status of our investments, obtaining and analyzing relevant investment-specific information and assessing current economic conditions, trends in capital markets and other factors, such as industry-sector, geographic and property-specific information. The Cigna Group Ventures.
Investment results are affected by the amount and timing of cash available for investment, economic and market conditions and asset allocation decisions. We routinely monitor and evaluate the status of our investments, obtaining and analyzing relevant investment-specific information and assessing current economic conditions, trends in capital markets and other factors, such as industry-sector, geographic and property-specific information.
We are not aware of any facts that could materially impact the continuing use of our intellectual property. 10 HUMAN CAPITAL MANAGEMENT The mission of The Cigna Group is to improve the health and vitality of those we serve. A healthy and diverse global workforce is essential to achieving our mission and our business growth strategies.
HUMAN CAPITAL MANAGEMENT The mission of The Cigna Group is to improve the health and vitality of those we serve. A healthy and diverse global workforce is essential to achieving our mission and our business growth strategies.
Department of the Treasury, which administers and enforces economic and trade sanctions against targeted foreign jurisdictions and regimes based on U.S. foreign policy and national security goals. Certain of our products are subject to the Department of the Treasury anti-money laundering regulations under the Bank Secrecy Act.
Office of Foreign Assets Control Sanctions and Anti-Money Laundering We are also subject to regulation by the Office of Foreign Assets Control of the U.S. Department of the Treasury, which administers and enforces economic and trade sanctions against targeted foreign jurisdictions and regimes based on U.S. foreign policy and national security goals.
Competition The primary competitive factors affecting our business are quality of care and cost-effectiveness of service and provider networks, effectiveness of medical care management, products that meet the needs of our clients and customers, total cost management, technology, and effectiveness of marketing and sales.
Cigna Healthcare offers individual ACA-compliant policies through public health insurance exchanges in select geographies. 7 Competition The primary competitive factors affecting our business are quality of care and cost-effectiveness of service and provider networks, effectiveness of medical care management, products that meet the needs of our clients and customers, total cost management, technology, and effectiveness of marketing and sales.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuccessfully executing on these initiatives depends on a number of factors, including our ability to: • differentiate our products, services and solutions from those of our competitors; • develop and bring to market new and innovative products, solutions or programs that focus on improving patient outcomes and experiences, assist in controlling costs, respond to government regulation or respond to challenges within the health care system; • develop and create responsible data and analytic solutions to support and improve outcomes for our products, services and solutions, including creating and developing solutions and services through partnerships with other industry participants; • grow and support our product portfolio, expand our addressable markets, and identify and introduce the proper mix, coordination or integration of products that the marketplace will accept; • evaluate drugs for efficacy, value and price to assist clients in selecting a cost-effective formulary; • offer cost-effective home delivery pharmacy and specialty services; • access or continue accessing key drugs and successfully penetrate key treatment categories in our specialty pharmacy business; • attract and retain sufficient numbers of qualified employees, particularly in a competitive job market; 19 • attract, develop and maintain collaborative relationships with a sufficient number of qualified partners; • attract new and maintain existing customer and client relationships; • leverage purchase volume to deliver discounts to health benefit providers; • transition health care providers from volume-based fee-for-service arrangements to a value-based system; • improve medical cost competitiveness in our targeted markets; • manage our medical, pharmacy, administrative and other operating costs effectively; and • contract with health care providers, pharmacy providers and pharmaceutical manufacturers on market competitive terms.
Biggest changeIn particular, our strategic and operational performance depends on our ability to: • grow and support our product portfolio, expand our addressable markets, develop and effectively implement products and services to improve the accessibility, affordability and transparency of healthcare, and identify and introduce the proper mix, coordination or integration of products that the marketplace will accept; • evaluate drugs for efficacy, value and price to assist clients in selecting a cost-effective formulary; • offer cost-effective home delivery pharmacy and specialty services; • access or continue accessing key drugs and successfully penetrate key treatment categories in our specialty pharmacy business; • deliver discounts to health benefit providers; • transition health care providers from volume-based, fee-for-service arrangements to a value-based system; • improve medical cost competitiveness in our targeted markets; • manage our medical, pharmacy, administrative and other operating costs effectively; • contract with health care providers, pharmacy providers and pharmaceutical manufacturers on market competitive terms; and • develop and create responsible data and analytic solutions to support and improve outcomes for our products, services and solutions, including creating and developing solutions and services through partnerships with other industry participants. 29 We will be unable to rapidly respond to competitive, economic and regulatory changes if we do not make important strategic and operational decisions quickly; define our appetite for risk; implement new governance, managerial and organizational processes smoothly; and communicate roles and responsibilities clearly.
These competitive factors have historically applied pressure on our operating margins and caused many companies, including us, to reduce the prices charged for products and services while sharing with clients a greater portion of the formulary fees and related rebates received from pharmaceutical manufacturers.
These competitive factors have historically applied pressure on our operating margins and caused many companies, including us, to reduce the prices charged for products and services while sharing with clients a greater portion of the formulary rebates and related fees received from pharmaceutical manufacturers.
If these benchmarks are no longer published by third parties, we, or our contractual partners, adopt other pricing benchmarks for establishing prices within the industry, legislation or regulation requires the use of other pricing benchmarks, or future changes in drug prices substantially deviate from our expectations, the short- or long-term impacts may have a material adverse effect on our business and results of operations.
If these benchmarks are no longer published by third parties; if we, or our contractual partners, adopt other pricing benchmarks for establishing prices within the industry; if legislation or regulation requires the use of other pricing benchmarks; or if future changes in drug prices substantially deviate from our expectations, the short- or long-term impacts may have a material adverse effect on our business and results of operations.
In addition, while we have certain standards for all vendors that provide us services, our vendors, and in turn, their own service providers, may become subject to the same types of security breaches.
In addition, while we have certain standards for all vendors that provide services to us, our vendors and, in turn, their own service providers may become subject to the same types of security breaches.
Delays in obtaining or failure to obtain or maintain these approvals could reduce our revenue or increase our costs. Additionally, we must maintain licenses and registrations in the jurisdictions in which we conduct business, and the suspension, material adverse modification or termination of such licenses and registrations could adversely affect our operations.
Delays in obtaining or failure to obtain or maintain these approvals could reduce our revenue or increase our costs. Additionally, we must maintain licenses and registrations in the jurisdictions in which we conduct business, and the suspension, material adverse modification or termination of such licenses and registrations could adversely affect operations.
Carrying indebtedness: • requires us to dedicate a portion of our cash flow from operations to debt payments, thereby reducing the availability of cash flow to fund our operations and growth strategy; • increases our vulnerability to general adverse economic and industry conditions, which may require us to dedicate an even greater percentage of our cash to the payment of principal and interest on our debt and limit our access to capital markets; • exposes us to increases in interest rates to the extent increased interest expense is not offset by increased income from our investment assets; and • limits our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry.
Carrying indebtedness: • requires us to dedicate a portion of our cash flow from operations to debt payments, thereby reducing the availability of cash flow to fund our operations and growth strategy; • increases our vulnerability to general adverse economic and industry conditions, which may require us to dedicate an even greater percentage of our cash to the payment of principal and interest on our debt and limit our access to capital markets; • exposes us to increases in interest rates to the extent that increased interest expense is not offset by increased income from our investment assets; and • limits our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry.
If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party providers or subcontractors that we or they engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our clients, customers and health care providers and hinder our ability to provide or establish appropriate pricing for products and services, retain and attract clients and customers, establish reserves and report financial results accurately and in a timely manner and maintain regulatory compliance, among other things.
If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party providers or subcontractors that we or they engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our clients, customers and health care providers and hinder our ability to provide or establish appropriate pricing for products and services, retain 25 and attract clients and customers, establish reserves, report financial results accurately and in a timely manner, and maintain regulatory compliance, among other things.
The collectability of amounts due from reinsurers is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract, whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract, and the magnitude and type of collateral supporting our reinsurance recoverable, such as holding sufficient qualifying assets in trusts or letters of credit issued.
The collectability of amounts due from reinsurers is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract; whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract; and the magnitude and type of collateral 31 supporting our reinsurance recoverable, such as holding sufficient qualifying assets in trusts or letters of credit issued.
Human or technological error has and could in the future result in, for example, unauthorized access to and acquisition, disclosure, modification, misuse, loss or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated or confidential data, including PII and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions, or denials of service.
Human or technological error has resulted in, and could in the future result in, for example, unauthorized access to and acquisition, disclosure, modification, misuse, loss or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated or confidential data, including PII and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions, or denials of service.
Our failure to effectively invest in, implement improvements to and properly maintain the uninterrupted operation, availability and data integrity of our systems could adversely affect our results of operations, financial position, cash flow and internal controls over financial reporting. 23 As a large global health company, we and our vendors are subject to cyberattacks or other privacy or data security incidents.
Our failure to effectively invest in, implement improvements to and properly maintain the uninterrupted operation, availability and data integrity of our systems could adversely affect our results of operations, financial position, cash flow and internal controls over financial reporting. As a large global health company, we and our vendors are subject to cyberattacks or other privacy or data security incidents.
You should carefully consider each of the risks and uncertainties discussed below, together with other information contained in this Form 10-K, including the MD&A. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect us.
You should carefully consider each of the risks and uncertainties discussed below, together with other information 18 contained in this Form 10-K, including the MD&A. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect us.
Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted fashion, necessary business functions, such as claims processing and payment, internet support and customer call centers, data centers and corporate facilities, the processing of new and renewal business, the maintenance of appropriate shipment and storage conditions for prescriptions (such as temperature and protection from contamination) and home delivery processing.
Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted fashion, necessary business functions, such as claims processing and payment; the operation of internet support and customer call centers, data centers and corporate facilities; the processing of new and renewal business; the maintenance of appropriate shipment and storage conditions for prescriptions (such as temperature and protection from contamination); and home delivery processing.
The laws and rules governing our business and related interpretations are increasing in number and complexity, are subject to frequent change, and can be inconsistent or in conflict with 27 each other. Noncompliance with applicable regulations by us or our third-party vendors could have material adverse effects on our business, results of operations, financial condition, liquidity and reputation.
The laws and rules governing our business and related interpretations are increasing in number and complexity, are subject to frequent change, and can be inconsistent or in conflict with each other. Noncompliance with applicable regulations by us or third-party vendors could have material adverse effects on our business, results of operations, financial condition, liquidity and reputation.
As we increase the amount of PII that we store and share digitally, our exposure to unauthorized uses and disclosures and data privacy and related cybersecurity risks increases, including the risk of undetected attacks, damage, loss, or unauthorized access or acquisition or misappropriation of proprietary or personal information. The cost of attempting to protect against these risks also increases.
As we increase the amount of PII that we store and share digitally, our exposure to unauthorized uses and disclosures and data privacy and related cybersecurity risks increases, including the risk of undetected attacks, damage, loss, or unauthorized access or acquisition or misappropriation of proprietary information or PII. The cost of attempting to protect against these risks also increases.
If providers refuse to contract with us, use their market position to negotiate more favorable contracts or place us at a competitive disadvantage, our ability to market products or to be profitable in those areas could be materially adversely affected. Additionally, certain regulations may impact our ability to obtain competitive prices.
If providers refuse to 21 contract with us, use their market position to negotiate more favorable contracts or place us at a competitive disadvantage, our ability to market products or to be profitable in those areas could be materially adversely affected. Additionally, certain regulations may impact our ability to obtain competitive prices.
If our cash flow and capital resources are insufficient to service our debt obligations, we may be forced to seek additional dividends from our subsidiaries, sell assets, seek additional equity or debt capital, or restructure our debt. Unfavorable developments in economic conditions may adversely affect our business, results of operations and financial condition.
If our cash flow and capital resources 30 are insufficient to service our debt obligations, we may be forced to seek additional dividends from our subsidiaries, sell assets, seek additional equity or debt capital, or restructure our debt. Unfavorable developments in economic conditions may adversely affect our business, results of operations and financial condition.
Increasing natural disasters in connection with climate change could also be a direct threat to us and our third-party vendors, service providers or other stakeholders. Natural disasters have impacted and may continue to impact our customers and pose a risk to our employees and facilities located in the impacted region.
Increasing natural disasters in connection with climate change could also be a direct threat to us and our third-party vendors, service providers or other stakeholders. Natural disasters have impacted, and may continue to impact, our customers and pose a risk to our employees and facilities located in the affected region.
If there is an interruption in business or loss of access to data resulting from a security breach, termination or transition in services, we may not be able to meet the demands of our customers and, in turn, our business and results of operations could be adversely impacted.
If there is an interruption in business or loss of access to data resulting from a security breach, termination or transition in services, we may not be able to meet the demands of our customers and, in turn, our business, liquidity and results of operations could be adversely impacted.
We are frequently the subject of regulatory market conduct and other reviews, audits and investigations by state insurance and health and welfare and pharmacy departments, attorneys general, DOJ, FTC, CMS, DOL and the HHS-OIG and comparable authorities in 29 foreign jurisdictions.
We are frequently the subject of regulatory market conduct and other reviews, audits and investigations by state insurance, health and welfare and pharmacy departments; attorneys general; the DOJ; the FTC; CMS; the DOL; the HHS-OIG; and comparable authorities in foreign jurisdictions.
If we are not able to accurately and 21 promptly anticipate and detect medical cost trends, our ability to take timely corrective actions to limit future costs and reflect our current benefit cost experience in our pricing process may be limited.
If we are not able to accurately and promptly anticipate and detect medical cost trends, our ability to take timely corrective actions to limit future costs and reflect our current benefit cost experience in our pricing process may be limited.
Additionally, joint ventures and equity investments present risks that are different from acquisitions, including risks related to specific operations and finances of the businesses we invest in; selection of appropriate parties; differing objectives of the various parties; competition between and among parties; compliance activities (including compliance with applicable CMS requirements); growing of the business in a manner acceptable to all the parties; the maintenance of positive relationships among the parties, clients and customers; and initial and ongoing governance of joint ventures and customer and business disruption that may occur upon a joint venture termination.
Further, joint ventures and equity investments present risks that are different from acquisitions, including risks related to specific operations and finances of the businesses we invest in; selection of appropriate parties; differing objectives of the various parties; competition between and among parties; compliance activities (including compliance with applicable CMS requirements); growing of the business in a manner acceptable to all parties; the maintenance of positive relationships among the parties, clients and customers; and initial and ongoing governance of joint ventures and customer and business disruption that may occur upon a joint venture termination.
A disruption, or threat of disruption, in our supply chain or inability to access or deliver products that meet requisite quality safety standards and patient needs in a timely and efficient manner could adversely impact our business.
A disruption, or threat of disruption, in our supply chain, or an inability to access or deliver products that meet requisite quality safety standards and patient needs in a timely and efficient manner, could adversely impact our business.
We must identify, assess and respond to new trends in the legislative and regulatory environment, as well as comply with the various existing regulations applicable to our business and respond to policymakers and enforcement agencies accordingly.
We must identify, assess and respond to new trends in the legislative and regulatory environment, as well as comply with the various existing laws and regulations applicable to our business and respond to policymakers and enforcement agencies accordingly.
Depending on how existing laws and regulations are interpreted, and as new laws go into 24 effect, we may have to make changes to our business practices to comply with such obligations.
Depending on how existing laws and regulations are interpreted, and as new laws go into effect, we may have to make changes to our business practices to comply with such obligations.
Fraud and abuse prohibitions encompass a wide range of activities including kickbacks for referral of customers, billing for unnecessary medical services, improper marketing and violations of patient privacy rights.
Fraud, waste and abuse prohibitions encompass a wide range of activities, including kickbacks for referral of customers, billing for unnecessary medical services, improper marketing and violations of patient privacy rights.
Continuing consolidation among physicians, hospitals and other providers; the growth of accountable care organizations; vertical integration of providers and other entities; changes in the organizational structures chosen by physicians, hospitals and providers; new market entrants, including those not traditionally in the health care industry; and the use of new modes of health delivery, including virtual care services, may affect the way providers interact with us and may change the competitive landscape in which we operate.
Many factors, including continuing consolidation among physicians, hospitals and other providers; the growth of accountable care organizations; vertical integration of providers and other entities; changes in the organizational structures chosen by physicians, hospitals and providers; new market entrants, including those not traditionally in the health services industry; and the use of new modes of health care delivery, including virtual care services, may affect the way providers interact with us and may change the competitive landscape in which we operate.
A significant disruption in service within our operations or among our key suppliers or other third parties could materially adversely affect our business and results of operations.
A significant disruption in service within our operations or among our key suppliers or other third parties could materially adversely affect our business, liquidity and results of operations.
Our ability to develop and maintain satisfactory relationships with providers may also be negatively impacted by other factors not associated with us, such as changes in Medicare or Medicaid reimbursement levels or programmatic changes, increasing pressure on revenue and other pressures on health care providers, and increasing consolidation activity among hospitals, physician groups and providers.
Our ability to develop and maintain satisfactory relationships with providers may also be negatively impacted by other factors not associated with us, such as increasing pressure on revenue and other pressures on health care providers; increasing consolidation activity among hospitals, physician groups and providers; and changes in Medicare or Medicaid reimbursement levels or programming.
We are also exposed to interest rate and equity risk associated with our pension obligations. Sustained declines in interest rates could have an adverse impact on the funded status of our pension plans and our reinvestment yield on new investments. See Note 16 to the Consolidated Financial Statements for more information on our obligations under the pension plans.
We are also exposed to interest rate and equity risk associated with our pension obligations. Sustained declines in interest rates could have an adverse impact on the funded status of our pension plans and our reinvestment yield on new investments. See Note 17 to the Consolidated Financial Statements for more information on our obligations under the pension plans.
If significant changes occur within the pharmacy provider marketplace, or if other issues arise with respect to our pharmacy networks, including the loss of or adverse change in our relationship with one or more key pharmacy providers, our business and financial results could be adversely affected.
If significant changes occur within the pharmacy provider marketplace, or if other issues arise with respect to our pharmacy networks, including the loss of or adverse change in our relationship with one or more key pharmacy providers, our business and results of operations could be adversely affected.
We cannot predict what effect, if any, such government investigations and audits may ultimately have on us or on the industry in general. However, we will likely continue to experience government scrutiny and audit activity, which has and may in the future result in civil penalties.
We cannot predict what effect, if any, such government investigations and audits may ultimately have on us or on the industry in general. However, we will likely continue to experience government scrutiny and audit activity, which has resulted in, and may result in, civil penalties.
Existing or future laws, rules, actions by governmental or regulatory authorities, or judgments could force us to change how we conduct our business, affect the products and services we offer and where we offer them, restrict revenue and enrollment growth, increase our costs, including medical, operating, health care technology and administrative costs, and require enhancements to our compliance infrastructure and internal controls environment.
Existing or future laws, regulations, actions by governmental or regulatory authorities, or judgments could force us to change how we conduct our business; affect the products and services we offer and where we offer them; restrict revenue and enrollment growth; increase our costs, including medical, operating, health care technology and administrative costs; increase our liability; and require enhancements to our compliance infrastructure and internal controls environment.
Further, failure to effectively implement or adjust our strategic and operational initiatives, such as by reducing operating costs, adjusting premium pricing or benefit design, or transforming our business model in response to laws, regulatory changes or executive actions may have a material adverse effect on our results of operations, financial condition and cash flows.
Failure to effectively implement or adjust our strategic and operational initiatives, such as reducing operating costs, adjusting premium pricing or benefit design, or transforming our business model in response to new laws, regulatory changes or executive actions may have a material adverse effect on our results of operations, financial condition and cash flows.
Changes in the overall composition of our pharmacy networks, including changes due to legislative, regulatory or executive action, or reduced pharmacy access under our networks, could have a negative impact on our claims volume or our competitiveness in the marketplace, which could cause us to fall short of certain guarantees in our contracts with clients or otherwise impair our business or results of operations.
Changes in the overall composition of our pharmacy networks, including changes due to legislative, regulatory or executive action, or reduced pharmacy access under our networks, could have a negative impact on our claims volume or our competitiveness in the marketplace, which could cause us to fall short of certain guarantees in our contracts with clients or otherwise materially adversely impact our business or results of operations.
We have been, and will likely continue to be, the target of computer viruses or other malicious codes, unauthorized access, cyberattacks or other computer-related penetrations. There have been, and will continue to be, large-scale cyberattacks within the health service industry.
We have been, and will likely continue to be, the target of computer viruses or other malicious codes, unauthorized access, cyberattacks or other computer-related penetrations. There have been, and will continue to be, large-scale cyberattacks within the health services industry.
These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to retrain our AI/ML, require us to comply with outside standards, or prevent or limit our use of AI/ML.
These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to retrain our AI/ML, require us to comply with outside standards, or cease or limit our use of AI/ML.
A description of material pending legal actions and other legal and regulatory matters is included in Note 21 to the Consolidated Financial Statements included in this Form 10-K. The outcome of litigation and other legal or regulatory matters is always uncertain.
A description of material pending legal actions and other legal and regulatory matters is included in Note 22 to the Consolidated Financial Statements included in this Form 10-K. The outcome of litigation and other legal or regulatory matters is always uncertain.
In addition, we have incurred and likely will continue to incur liability for practices and claims related to our health care business, such as marketing misconduct, failure to timely or appropriately pay for or provide health care, provider network structure, poor outcomes for care delivered or arranged, provider disputes including disputes over compensation or contractual provisions, ERISA claims, allegations related to calculations of cost-sharing, and claims related to our administration of self-funded business.
We also have incurred and likely will continue to incur liability for practices and claims related to our health care business, such as marketing misconduct; failure to timely or appropriately pay for or provide health care services; provider network structure; poor outcomes for care delivered or arranged; provider disputes, including disputes over compensation or contractual provisions; ERISA claims; allegations related to calculations of cost-sharing; and claims related to our administration of self-funded business.
In addition to contracting with physicians and other health care providers for services, we employ physicians, pharmacists, nurses and other health care providers at our home delivery and specialty pharmacies, onsite low-acuity and primary care practices and infusion clinics that we manage and operate for our customers, as well as certain clinics for our employees.
In addition to contracting with physicians and other health care providers for services, we employ physicians, pharmacists, nurses and other health care providers at our home delivery and specialty pharmacies, onsite low-acuity and primary care practices that we manage and operate for our customers, and certain clinics for our employees.
Any failure, or alleged failure, to comply with various state and federal health care laws and regulations, including those related to the CIA or otherwise directed at preventing fraud and abuse in government-funded programs, has resulted in and could in the future result in investigations or litigation, such as actions under the federal False Claims Act and similar whistleblower statutes under state laws.
Any failure, or alleged failure, to comply with various state and federal health care laws and regulations, including those directed at preventing fraud, waste and abuse in government-funded programs, has resulted in, and could in the future result in, investigations or litigation, such as actions under the federal False Claims Act and similar whistleblower statutes under state laws.
These budgetary pressures also could cause the government to impose new or a higher level of taxes or assessments on us, such as premium taxes on insurance companies and HMOs and surcharges or fees on select fee-for-service and capitated medical claims.
These budgetary pressures also could cause the government to impose new or higher taxes or assessments on us, such as premium taxes on insurance companies and HMOs and surcharges or fees on select fee-for-service and capitated medical claims.
Additionally, we have, in the past, been, and may in the future be, subject to qui tam actions in which the government may or may not intervene.
Additionally, we have previously been, and may in the future be, subject to qui tam actions in which the government may or may not intervene.
In addition, various government agencies have conducted investigations, inquiries and audits into certain pharmacy benefit management practices, which in certain instances has resulted in litigation or other adverse outcomes. For example, the FTC recently released staff reports on PBMs and the accessibility and affordability of prescription drugs.
In addition, various government agencies have conducted investigations, inquiries and audits into certain pharmacy benefit management practices, which in certain instances have resulted in litigation or other adverse outcomes for our Company. For example, the FTC has released two staff reports on PBMs and the accessibility and affordability of prescription drugs.
Industry shifts could result (and have resulted) from, among other things: • a large intra- or inter-industry merger or industry consolidation; • strategic alliances; • new or alternative business models or new government options or offerings; • continuing consolidation among physicians, hospitals and other health care providers, as well as changes in the organizational structures chosen by physicians, hospitals and health care providers; • new market entrants, including those not traditionally in the health service industry; • the ability of larger employers and clients to contract directly with providers; • technological changes and rapid shifts in the use of technology, such as telehealth and AI; • the impact or consequences of legislation, executive actions or regulatory changes; • impacts to distribution channels, including changes to the United States Postal Service or the consolidation of shipping carriers; • increased drug acquisition cost or unexpected changes to drug pricing trend; • changes in the generic/biosimilar drug market or the failure of new generic/biosimilar drugs to come to market; or • changes in utilization of health care, prescription drugs or other covered services and items, including under risk-based contracts in the health benefit management market and for those businesses that utilize risk adjustment methodology.
Industry shifts have resulted and could result from, among other things: • a large intra- or inter-industry merger or industry consolidation; • strategic alliances; • new or alternative business models or new government options or offerings; • continuing consolidation among physicians, hospitals and other health care providers, as well as changes in the organizational structures chosen by physicians, hospitals and health care providers; • new market entrants, including those not traditionally in the health services industry; • the ability of larger employers and clients to contract directly with providers; • technological changes and rapid shifts in the use of technology, such as telehealth and AI; • the impact or consequences of legislation, executive actions or regulatory changes including premium rate increases, public debates over drug pricing, government involvement in drug pricing and purchasing, and public debate over current or proposed legislation; • impacts to distribution channels, including changes to the United States Postal Service or the consolidation of shipping carriers; • increased drug acquisition cost or unexpected changes to drug pricing trend; • changes in the generic/biosimilar drug market or the failure of new generic/biosimilar drugs to come to market; and • changes in utilization of health care, prescription drugs or other covered services and items, including under risk-based contracts in the health benefit management market and for those businesses that utilize risk adjustment methodology.
In some markets, certain providers, particularly hospitals, physician/hospital organizations and multispecialty physician groups, may have significant or controlling market positions that could result in a diminished bargaining position for us.
In some markets, certain providers, particularly hospitals, physician/hospital organizations and multi-specialty physician groups, may have significant or controlling market positions that could result in a diminished bargaining position for us.
Our pharmacy services operations are subject to the clinical quality, patient safety and other risks inherent in the dispensing, packaging and distribution of drugs, including claims related to purported dispensing and other operational errors.
Our pharmacy services operations are subject to liability arising from clinical quality, patient safety and other risks inherent in the dispensing, packaging and distribution of drugs, including claims related to purported dispensing and other operational errors.
Our indebtedness could adversely affect our financial condition, our ability to react to changes in the economy or our industry and could divert our cash flow from operations for debt service costs, leaving us with less cash flow from operations available to fund growth, stock repurchases, dividends and other corporate purposes.
Our indebtedness could adversely affect our financial condition and our ability to react to economic or industry changes, and could divert our cash flow from operations for debt service costs, leaving us with less cash flow from operations available to fund growth, stock repurchases, dividends and other corporate purposes.
We are subject to the credit risk of our reinsurers. We enter into reinsurance arrangements with other insurance companies, primarily in connection with acquisition or divestiture transactions when the underwriting company is not being acquired or sold. Under all reinsurance arrangements, reinsurers assume insured losses, subject to certain limitations or exceptions that may include a loss limit.
We enter into reinsurance arrangements with other insurance companies, primarily in connection with acquisition or divestiture transactions when the underwriting company is not being acquired or sold. Under all reinsurance arrangements, reinsurers assume insured losses, subject to certain limitations or exceptions that may include a loss limit.
Considerable variability is inherent in such estimates, and the accuracy of the estimates is highly sensitive to changes in medical claims submission and processing patterns or procedures; changes in customer base and product mix; changes in the utilization of prescription drugs, medical or other covered items or services; changes in medical cost trends; changes in our health management practices; changes in regulations; and the introduction of new benefits and products.
Considerable variability is inherent in such estimates, and the accuracy of the estimates is highly sensitive to a number of factors including, among others, changes in medical claims submission and processing patterns or procedures; changes in customer base and product mix; changes in the utilization of prescription drugs, medical or other covered items or services; changes in medical cost trends; changes in our health management practices; changes in regulations; and the introduction of new benefits and products.
Our use of artificial intelligence and machine learning present regulatory and legal challenges that could negatively affect our business and our reputation. Our use of AI, including ML technologies, as well as more recent technological advances in AI/ML, poses risks to us and subjects us to new and existing laws and regulations.
Our use of artificial intelligence and machine learning present regulatory and legal challenges that could negatively affect our business and our reputation . Our use of AI and ML technologies, as well as more recent technological advances in AI/ML, pose risks to us and subject us to new and existing laws and regulations.
Our information technology strategy and execution are critical to our continued success. We must continue to invest in and maintain long-term solutions that will enable us to anticipate customer needs and expectations, enhance the customer experience, act as a differentiator in the market, and protect against cybersecurity risks and threats or other events that could disrupt our information technology systems.
We must continue to invest in and maintain long-term solutions that will enable us to anticipate customer needs and expectations, enhance the customer experience, act as a differentiator in the market, and protect against cybersecurity risks and threats or other events that could disrupt our information technology systems.
Our failure to comply with laws and regulations governing our conduct outside of the United States or to establish constructive relations with non-U.S. regulators could have a material adverse effect on our business, results of operations, financial condition, liquidity and long-term growth. Please see "—Legal and Compliance Risks" below.
Our failure to comply with laws and regulations governing our conduct outside of the United States, or to establish constructive relations with non-U.S. regulators, could have a material adverse effect on our business, results of operations, financial condition, liquidity and long-term growth.
For example: • Employers may take action to reduce their operating costs by modifying, delaying or canceling plans to purchase our products or making changes in the mix of products purchased that are unfavorable to us. • Higher unemployment rates, employee attrition (including challenges filling open positions in light of a competitive job market) and workforce reductions could result in lower enrollment in our employer-based plans (including an increase in the number of employees who opt out of employer-based plans) or our individual plans. • Significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase costs. • Because of unfavorable economic conditions or legislation and regulation affecting employer-sponsored coverage, employers may stop offering health care coverage to employees or elect to offer this coverage on a voluntary, employee-funded basis as a means to reduce their operating costs. 32 • If clients are not successful in generating sufficient funds or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. • Our clients or potential clients may force us to compete more vigorously on factors such as price and service to retain or obtain their business. • Our clients may be acquired, consolidated, or otherwise fail to successfully maintain or grow their business or workforce, which could reduce the number of customers we serve or otherwise result in lower than anticipated utilization of our services. • A prolonged unfavorable economic environment could adversely impact the financial position of hospitals and other health care providers, potentially increasing our medical costs. • Our third-party vendors could significantly and quickly increase their prices or reduce their output to reduce their operating costs.
For example: • Employers may take action to reduce their operating costs by modifying, delaying or canceling plans to purchase our products, or making changes in the mix of products purchased that are unfavorable to us. • Higher unemployment rates, employee attrition (including challenges filling open positions in light of a competitive job market) and workforce reductions could result in lower enrollment in our employer-based plans (including an increase in the number of employees who opt out of employer-based plans) or our individual plans. • Significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase costs. • Because of unfavorable economic conditions or legislation and regulation affecting employer-sponsored coverage, employers may stop offering health care coverage to employees or elect to offer this coverage on a voluntary, employee-funded basis as a means to reduce their operating costs. • If clients are not successful in generating sufficient funds or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. • Our clients or potential clients may force us to compete more vigorously on factors such as price and service to retain or obtain their business. • Our clients may be acquired, consolidated, or otherwise fail to successfully maintain or grow their business or workforce, which could reduce the number of customers we serve or otherwise result in lower than anticipated utilization of our services. • A prolonged unfavorable economic environment could adversely impact the financial position of hospitals and other health care providers, potentially increasing our medical costs. • Our third-party vendors could significantly and quickly increase their prices or reduce their output to reduce their operating costs (our business depends on our ability to perform necessary business functions in an efficient and uninterrupted fashion). • Other insurers' financial condition may be weakened, increasing the risk that we will receive significant assessments for obligations of insolvent insurers pursuant to guaranty associations, indemnity funds, or other similar laws and regulations.
Court decisions and legislative and regulatory activity may increase our exposure to any of these types of claims. In some cases, substantial noneconomic or punitive damages may be sought. We procure insurance coverage to cover some of these potential liabilities, and we also self-insure a significant portion of our litigation risks.
Court decisions and legislative and regulatory activities may increase our exposure to any type of claim. In some cases, substantial noneconomic or punitive damages may be sought. We procure insurance coverage to cover some of these potential liabilities, and we also self-insure a significant portion of our litigation risks.
If such collaborative arrangements do not result in the lower medical costs that we project, if we fail to attract health care providers to such arrangements or if we are less successful at implementing such arrangements than our competitors, our attractiveness to customers may be reduced and our ability to profitably grow our business may be adversely affected.
If such collaborative arrangements do not result in the lower medical costs that we project or do not improve value to our customers and clients, if we fail to attract health care providers to such arrangements or if we are less successful at implementing such arrangements than our competitors, our attractiveness to customers may be reduced and our ability to profitably grow our business o r improve value for our customers, patients and clients may be adversely affected.
These events would negatively affect our ability to compete, our reputation, our customer base and our revenues and expose us to mandatory disclosure requirements, government investigations, litigation, and other enforcement proceedings, material fines, penalties, or remediation costs and compensatory, special, punitive and statutory damages, consent orders, and other adverse actions, any of which could adversely affect our business, results of operations, financial condition or liquidity.
Any actual or perceived data security incident could negatively affect our ability to compete, our reputation, our customer base and our revenues and could expose us to mandatory disclosure requirements; government investigations, litigation and other enforcement proceedings; material fines, penalties or remediation costs; compensatory, special, punitive or statutory damages; consent orders; or other adverse actions, any of which could adversely affect our business, results of operations, financial condition or liquidity.
We currently have overfunded obligations in our frozen pension plan. A significant decline in the value of the plan's equity and fixed income investments or unfavorable changes in applicable laws or regulations could materially increase our expenses and change the timing and amount of required plan funding. This could reduce the cash available to us, including our subsidiaries.
A significant decline in the value of the plan's equity and fixed income investments, or unfavorable changes in applicable laws or regulations, could materially increase our expenses and change the timing and amount of required plan funding. This could reduce the cash available to us, including our subsidiaries.
In September 2024, the FTC filed a complaint against Express Scripts and two other PBMs for allegedly engaging in anticompetitive and unfair rebate practices related to insulin drug pricing.
In September 2024, the FTC filed an administrative complaint against Express Scripts and two other PBMs, among others, for allegedly engaging in anticompetitive and unfair rebate practices related to insulin drug pricing.
Our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation, availability and data integrity of our information technology and other business systems.
Operational Risks Our business depends on our ability to effectively invest in, improve and properly maintain the uninterrupted operation, availability and data integrity of our information technology and other business systems.
More than 67,000 pharmacies participated in one or more of our networks as of December 31, 2024. The ten largest retail pharmacy chains represent approximately 60% of the total number of stores in our largest network. In certain geographic areas of the United States, our networks may be comprised of higher concentrations of one or more large pharmacy chains.
More than 65,000 pharmacies participated in one or more of our networks as of December 31, 2025. The 10 largest retail pharmacy chains represent approximately 47% of the total number of stores in our largest network. In certain geographic areas of the United States, our networks may be comprised of higher concentrations of one or more large pharmacy chains.
Each of the rating agencies reviews ratings periodically, and there can be no assurance that current ratings will be maintained in the future. A downgrade of any of these ratings in the future could make it more difficult to either market our products successfully or raise capital to support business growth.
Each of the rating agencies reviews ratings periodically, and current ratings may not be maintained in the future. A downgrade of any of these ratings could make it more difficult to either market our products successfully or raise capital to support business growth.
We are required to obtain and maintain insurance and other regulatory approvals to, among other things, market many of our products, expand into additional geographic or product markets, increase prices for certain regulated products, and consummate some of our acquisitions and dispositions.
For example, we are required to obtain and maintain approvals from state boards of pharmacy, departments of insurance, and other federal and state regulatory agencies to, among other things, market many of our products, expand into additional geographic or product markets, increase prices for certain regulated products, and consummate some of our acquisitions and dispositions.
Changes in drug pricing or industry pricing benchmarks could materially impact our financial performance. Contracts in the prescription drug industry, including our contracts with retail pharmacy networks and our pharmacy and specialty pharmacy clients, generally use pricing metrics published by third parties as benchmarks to establish pricing for prescription drugs.
Contracts in the prescription drug industry, including our contracts with retail pharmacy networks and our pharmacy and specialty pharmacy clients, generally use pricing metrics published by third parties as benchmarks to establish pricing for prescription drugs.
We face risks related to litigation, regulatory audits and investigations. We are routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of business.
In addition, we are routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of business.
We have dedicated significant resources to implement privacy and security technologies, processes and procedures to protect PII and provide employee awareness training around phishing, malware and other cyber risks; however, there are no assurances that such measures will be effective against all types of security incidents.
We have dedicated significant resources to implement privacy and security technologies, processes and procedures to protect PII and 26 provide employee awareness training around phishing, malware and other cyber risks; however, such measures may not be effective against all types of security incidents.
Our sales could be materially adversely affected if we are unable to attract, retain and support such independent producers and consultants or if our sales strategy is not appropriately aligned across distribution channels.
Our sales could be materially adversely affected if we are unable to attract, retain and support such independent producers and consultants or if our enterprise sales strategy is not appropriately aligned across product lines and producer relationships.
While we believe that our historical tax positions are consistent with applicable laws, regulations and existing precedent, there can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. The trading price of our securities may react to the announcement of such proposals.
While we believe that our historical tax positions are consistent with applicable laws, regulations and existing precedent, our tax positions could be challenged by relevant tax authorities, and we may not be successful in any such challenge. The market price of our securities may react to the announcement of such proposals.
If we fail to develop and maintain satisfactory relationships with health care payors, physicians, hospitals and other health service providers and with producers and consultants, our business and results of operations may be adversely affected.
If we fail to develop and maintain satisfactory relationships with health care payors, physicians, hospitals and other health service providers and with, producers and consultants, our business and results of operations may be adversely affected. We contract with or employ physicians, hospitals and other health service providers and facilities to provide health services to our customers and patients.
Our failure to implement adequate business continuity and disaster recovery strategies could significantly reduce our ability to provide products and services to our customers and clients, which could have material adverse effects on our business and results of operations.
Our failure to implement adequate business continuity and disaster recovery strategies could significantly reduce our ability to provide products and services to our customers and clients, which could have material adverse effects on our business and results of operations. Our information technology strategy and execution are critical to our continued success.
We also provide in-home care through health care providers that we employ, as well as through third-party contractors. As such, we may be subject to liability for certain acts, omissions or injuries caused by our employees or agents, or that occur at one of these practices, pharmacies or clinics.
We also provide virtual primary care, urgent care, dermatology services and behavioral health services through clinicians that we employ, as well as through third-party contractors. As such, we may be subject to liability for certain acts, omissions or injuries caused by our employees or agents, or that occur at one of these practices, pharmacies or clinics.
Legal and Compliance Risks Our business is subject to substantial government regulation, as well as new laws or regulations or changes in existing laws or regulations that could have a material adverse effect on our business, results of operations, financial condition and liquidity. Our business is regulated at the federal, state, local and international levels.
Legal, Regulatory and Public Policy Risks Arising from Our Business Our business is subject to substantial government regulation, and new laws or regulations or changes in existing laws or regulations could have a material adverse effect on our business, results of operations, financial condition and liquidity. Our business is regulated at the federal, state and international level.
The market values of our investments vary depending on economic and market conditions with no offsetting change in the value of a portion of our liabilities. A substantial portion of our investment assets are in fixed interest-yielding debt securities of varying maturities and commercial mortgage loans. The value of these investment assets can fluctuate significantly with changes in market conditions.
A substantial portion of our investment assets are in fixed interest-yielding debt securities of varying maturities and commercial mortgage loans. The value of these investment assets can fluctuate significantly with changes in market conditions.
We are also routinely involved in legal matters arising from our health services business, including without limitation claims related to the dispensing of pharmaceutical products by our home delivery and specialty pharmacies, pharmacy benefit management services, such as formulary management services, health benefit management services and provider services.
We face risks related to litigation, regulatory audits and investigations. We are routinely involved in legal matters arising from our health services business, including but not limited to claims related to the dispensing of pharmaceutical products by our home delivery and specialty pharmacies; pharmacy benefit management services, such as formulary management services; health benefit management services; and provider services.
Strategic transactions involve risks and we may not realize the expected benefits because of integration or separation difficulties, underperformance relative to our expectations and other challenges, which could lead to an impairment charge.
Please see "—Legal, Regulatory and Public Policy Risks Arising from our Business" above. 28 Strategic transactions involve risks, and we may not realize the expected benefits because of integration or separation difficulties, underperformance relative to our expectations, and other challenges, which could lead to an impairment charge.
Although we could attempt to mitigate or cover our exposure from such increased costs through, among other things, increases in premiums, there can be no assurance that we will be able to mitigate or cover all of such costs, which may have a material adverse effect on our business, results of operations, financial condition and liquidity.
Although we could attempt to mitigate or cover our exposure from such increased costs through, among other things, increases in premiums, we may be unable to mitigate or cover all such costs, which may have a material adverse effect on our business, results of operations, financial condition and liquidity. We are subject to the credit risk of our reinsurers.
For example, in the year ended December 31, 2024, we determined our investment in VillageMD was fully impaired and recorded a $2.7 billion loss in Net investment losses in our Consolidated Statements of Income.
For example, in the year ended December 31, 2024, we determined our investment in VillageMD was fully impaired and recorded a $2.7 billion loss in Net investment gains/losses in our Consolidated Statements of Income. See Note 19 to the Consolidated Financial Statements for more information on goodwill and intangibles.
Several of our businesses act as business associates to their covered entity clients and, as a result, collect, receive, use, disclose, transmit and maintain PHI in order to provide services to these customers. HHS administers an audit program to assess HIPAA compliance efforts by covered entities and business associates.
Several of our businesses act as business associates to their covered entity clients and, as a result, collect, receive, use, disclose, transmit and maintain PHI in order to provide services to these customers.
If there are delays or difficulties in changing business processes or our third-party vendors do not perform as expected, we may not realize, or not realize on a timely 26 basis, the anticipated economic and other benefits of these relationships. This could result in additional costs or regulatory compliance issues or create other operational or financial problems for us.
Delays or difficulties in changing business processes, or the failure of our third-party vendors to perform as expected, may prevent us from realizing the anticipated economic and other benefits of these relationships, whether on a timely basis or at all. This could result in additional costs or regulatory compliance issues or create other operational or financial problems for us.
Responses to such scenarios have included and may include, among other things, making temporary policy changes, such as waiving various medical requirements, assisting with replacement medications, transferring prescriptions and expanding our help line.
Responses to such scenarios have included and may include, among other things, making temporary policy changes, such as waiving various medical requirements; assisting with replacement medications; transferring prescriptions; and expanding our help line. We face political, legal, operational, regulatory, economic and other risks in connection with our international operations.
We are in the process of preparing our initial response to OCR's request. As participation in this audit is voluntary, the information provided will not result in any HIPAA enforcement action or civil monetary penalty; however, any serious compliance issues could open up subsequent compliance reviews that could include a range of remedies from OCR.
As participation in this audit was voluntary, the information provided did not result in any HIPAA enforcement action or civil monetary penalty; however, any serious compliance issues could open up subsequent compliance reviews that could include a range of remedies from OCR.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIf we are unable to prevent or contain the effects of any such attacks, or fail to ensure vendors do the same, we may suffer exposure to substantial liability, reputational harm, loss of revenue or other damages," the sophistication of cybersecurity threats continues to increase, and the preventive actions we take to reduce the risk of cybersecurity incidents and protect our systems and information may become insufficient.
Biggest changeIf we are unable to prevent or contain the effects of any such attacks, or fail to ensure vendors do the same, we may suffer exposure to substantial liability, reputational harm, loss of revenue or other damages." Cybersecurity Governance Our Board of Directors (the "Board") has ultimate oversight over our privacy and cybersecurity programs and strategy and is responsible for ensuring that we have risk management policies and processes in place to meet and mitigate evolving risks and threats.
We undertake a number of critical security processes to mitigate and protect against cybersecurity risks, which include but are not limited to (i) identity and access management; (ii) security awareness and training; (iii) security operations and monitoring; (iv) change 33 management; (v) disaster recovery/business continuity; (vi) intelligence feeds; (vii) physical security; (viii) third-party vendor security reviews; (ix) vulnerability management/patching; and (x) cybersecurity incident reporting.
We undertake a number of critical security processes to mitigate and protect against cybersecurity risks, which include but are not limited to (i) identity and access management; (ii) security awareness and training; (iii) security operations and monitoring; (iv) change management; (v) disaster recovery/business continuity; (vi) intelligence feeds; (vii) physical security; (viii) third-party vendor security reviews; (ix) vulnerability management/patching; and (x) cybersecurity incident reporting.
Suppliers that have access to, host or transmit our data are contractually required to comply with our Security Policies and Standards. Additionally, suppliers may be subject to periodic security audits or risk assessments, which include security questionnaires, security capabilities and maturity assessments, controls evidence reviews, application vulnerability assessments, public internet presence monitoring, and alignment reviews with service-specific industry standards.
Suppliers that access, host or transmit our data are contractually required to comply with our Security Policies and Standards. Additionally, suppliers may be subject to periodic security audits or risk assessments, which include security questionnaires, security capabilities and maturity assessments, controls evidence reviews, application vulnerability assessments, public internet presence monitoring, and alignment reviews with service-specific industry standards.
Our information protection department maintains a risk register that is used to manage cybersecurity risks associated with its business activities, technology assets and its interaction with business, information technology and security parties, internal and external. Cybersecurity risks are also periodically reviewed by Enterprise Risk Management to ensure appropriate oversight of cybersecurity risk management activities.
Our information protection department maintains a risk register that is used to manage cybersecurity risks associated with its business activities, technology assets, and its interaction with internal and external business, information technology and security parties. 32 Cybersecurity risks are also periodically reviewed by Enterprise Risk Management to ensure appropriate oversight of cybersecurity risk management activities.
On an annual basis, the Board reviews our cybersecurity program, including the threat landscape and related controls, and periodically conducts cybersecurity tabletop exercises. Our dedicated cybersecurity team is led by our GCISO. Our current GCISO joined the Company in October 2023 and works closely with senior management to develop and innovate the cybersecurity strategy and risk management.
On an annual basis, the Board reviews our cybersecurity program, including the threat landscape and related controls, and periodically conducts cybersecurity tabletop exercises. Our dedicated cybersecurity team is led by our GCISO. Our current GCISO joined the Company in October 2023 and works closely with senior management to develop and innovate the cybersecurity and risk management strategies.
These include Health Information Trust Alliance for health care data security, PCI DSS for payment security and System Organization Controls 2 for information security and related controls for specific business lines and core processes. We also perform an annual maturity assessment and benchmark our security controls to identify opportunities to strengthen our cybersecurity program.
These include Health Information Trust Alliance ("HITRUST") for health care data security, PCI DSS for payment security, and System Organization Controls 2 ("SOC 2") for information security and related controls for specific business lines and core processes. We also perform an annual maturity assessment and benchmark our security controls to identify opportunities to strengthen our cybersecurity program.
Certain members of the Board have cybersecurity certifications. The Board executes this oversight directly and through both the Audit Committee, for cybersecurity purposes, and the Compliance Committee, for privacy purposes. In these capacities, these committees are regularly briefed by the Global Chief Information Security Officer ("GCISO") and Chief Privacy Officer on cybersecurity and privacy matters.
Certain members of our Board have cybersecurity certifications. Throughout 2025, the Board executed this oversight directly and through both the Audit Committee, for cybersecurity purposes, and the Compliance Committee, for privacy purposes. In these capacities, these committees were regularly briefed by the Global Chief Information Security Officer ("GCISO") and Chief Privacy Officer on cybersecurity and privacy matters.
These briefings are designed to provide visibility about the identification, assessment and management of critical risks, audit findings, and management's risk mitigation strategies. Additionally, these briefings include information about current trends in the environment, incident preparedness, artificial intelligence and various components of our cybersecurity and privacy programs.
These briefings were designed to provide visibility about the identification, assessment and management of critical risks, audit findings, and management's risk mitigation strategies. Additionally, these briefings included information about current trends in the environment, incident preparedness, AI, and various components of our cybersecurity and privacy programs.
To enhance our preparedness and practice our collective cybersecurity response capabilities, we conduct tabletop exercises with leaders, stakeholders, subject matter experts and certain executives that are developed in partnership with external security experts. These events are designed to exercise and engage some of the most critical areas of cybersecurity incident response and preparedness through an interactive/evolving, simulated scenario.
These events are developed in partnership with external security experts and designed to exercise and engage some of the most critical areas of cybersecurity incident response and preparedness through an interactive and evolving simulated scenario.
That said, as discussed more fully under Part I, Item 1A "Risk Factors – Strategic and Operational Risks – As a large global health company, we and our vendors are subject to cyberattacks or other privacy or data security incidents.
However, future cybersecurity threats or incidents could materially affect us, including our business strategy, results of operations or financial condition. For more information on our cybersecurity-related risks, see Part I, Item 1A "Risk Factors – Operational Risks – As a large global health company, we and our vendors are subject to cyberattacks or other privacy or data security incidents.
Our cybersecurity policies and standards are reviewed annually and are mainly guided by the NIST 800-53 Cybersecurity Framework. In addition to the NIST framework, we leverage the International Organization for Standardization 27001 and 27002 standards. Our information protection policies and standards are informed by NIST 800-53b, moderate-level security control baseline requirements.
Our cybersecurity policies and standards are reviewed annually and are mainly guided by the NIST 800-53 Cybersecurity Framework. In addition to the NIST framework, we leverage the International Organization for Standardization 27001 and 27002 standards. To enhance our preparedness and practice our collective cybersecurity response capabilities, we conduct tabletop exercises with leaders, stakeholders, subject matter experts and certain executives.
Item 1C. CYBERSECURITY Cybersecurity Strategy and Risk Management Our comprehensive cybersecurity program is supported by policies and procedures designed to protect our systems and operations as well as the sensitive personal information and data of our clients and customers from foreseeable cybersecurity threats. This program is an integral component of our enterprise risk management program.
Our comprehensive cybersecurity program is supported by policies and procedures designed to protect our systems and operations, as well as sensitive personal information and data, from foreseeable cybersecurity threats. Core to our security model is our defense-in-depth framework, comprising multiple layers of processes and technologies that help prevent, detect and respond to threats.
Event monitoring technologies run continuously, detecting suspected intrusion attempts and alerting our Cybersecurity Incident Response Team.
Our approach to safeguarding against external threats incorporates a suite of preventive technologies, including malicious email blocking, defenses against automated attacks and multifactor authentication. Event monitoring technologies run continuously, detecting suspected intrusion attempts and alerting our Cybersecurity Incident Response Team.
Removed
Core to our security model is our defense-in-depth framework, comprising multiple layers of processes and technologies that help prevent, detect and respond to threats. Our approach to safeguarding against external threats incorporates a suite of preventive technologies, including malicious email blocking, defenses against automated attacks and multifactor authentication.
Added
Item 1C. CYBERSECURITY Cybersecurity Strategy and Risk Management Cybersecurity is a core element of our enterprise risk management strategy. Safeguarding business information, intellectual property, and the data of customers, patients, employees and business partners is vital for operational continuity, regulatory compliance and sustaining stakeholder trust.
Removed
Accordingly, no matter how well designed or implemented our controls are, we will not be able to anticipate all attacks of these types, and we may not be able to implement effective preventive measures against such security breaches in a timely manner. 34 Cybersecurity Governance Our Board has ultimate oversight over our privacy and cybersecurity programs and strategy and is responsible for ensuring that we have risk management policies and processes in place to meet and mitigate evolving risks and threats.
Added
Beginning in 2026, oversight of cybersecurity matters has transitioned to the Board's Finance & Technology Committee. The Finance & Technology Committee now receives similar updates on cybersecurity and information protection programs from the GCISO as described above.
Added
Throughout 2025, the Compliance Committee, now the Audit & Compliance Committee, oversaw privacy risks and related matters, including through regular updates from our Chief Compliance and Risk Officer.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLouis, Missouri, and leased office space at Two Liberty Place located at 1601 Chestnut Street in Philadelphia, Pennsylvania. These principal domestic office locations total approximately 2 million square feet. The pharmacy operations consist of 9 home delivery pharmacies, 35 specialty pharmacies and 4 high-volume automated dispensing pharmacies located throughout the United States.
Biggest changeLouis, Missouri; and leased office space at Two Liberty Place, located at 1601 Chestnut Street in Philadelphia, Pennsylvania. These principal domestic office locations total approximately 1.8 million square feet. The pharmacy operations consist of 11 home delivery pharmacies, 35 specialty pharmacies and four high-volume automated dispensing pharmacies located throughout the United States.
Our high-volume automated dispensing pharmacies are located in Arizona, Indiana, Missouri and New Jersey. We believe our properties are adequate and suitable for our business as presently conducted. The foregoing does not include information on investment properties.
Our high-volume automated dispensing pharmacies are located in Arizona, Indiana, Missouri and New Jersey. 33 We believe our properties are adequate and suitable for our business as presently conducted. The foregoing does not include information on investment properties.
Our international properties contain approximately 1.4 million square feet located throughout 22 countries. Our principal domestic office locations include the Wilde Building, located at 900 Cottage Grove Road in Bloomfield, Connecticut (our corporate headquarters, which we own), the Evernorth Health Services leased corporate offices located at and around One Express Way in St.
Our international properties contain approximately 1.8 million square feet located throughout 23 countries. Our principal domestic office locations include the Wilde Building, located at 900 Cottage Grove Road in Bloomfield, Connecticut (our corporate headquarters, which we own); the Evernorth Health Services leased corporate offices located at and around One Express Way in St.
Item 2. PROPERTIES At the end of 2024, our global real estate portfolio consisted of approximately 9.2 million square feet of owned and leased properties to support the operations of our reporting segments. Our domestic portfolio had approximately 7.8 million square feet in 50 states, the District of Columbia and the U.S. Virgin Islands.
Item 2. PROPERTIES At the end of 2025, our global real estate portfolio consisted of approximately 8.1 million square feet of owned and leased properties to support the operations of our reporting segments. Our domestic portfolio had approximately 6.3 million square feet in 42 states, District of Columbia and the U.S. Virgin Islands.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changePALMER, 48, Executive Vice President for Enterprise Strategy of The Cigna Group and President and Chief Executive Officer of Evernorth Health Services beginning January 2024; President and Chief Executive Officer of Evernorth Health Services from January 2022 to January 2024; President and Chief Operating Officer from January 2021 until December 2021; Executive Vice President and Chief Financial Officer of The Cigna Group from June 2017 to January 2021; Deputy Chief Financial Officer from February 2017 until June 2017; Senior Vice President, Chief Business Financial Officer from November 2015 to February 2017; and Vice President, Business Financial Officer, Health Care from April 2012 to November 2015.
Biggest changeDENNISON, 55, Executive Vice President and Chief Financial Officer of The Cigna Group beginning March 2025; Deputy Corporate Financial Officer from January 2024 until March 2025. Executive Vice President and Chief Financial Officer of Nasdaq, Inc. from March 2021 until December 2023; Senior Vice President, Controller and Chief Accounting Officer from October 2015 until March 2021.
JONES, 54, Executive Vice President, Chief Administrative Officer and General Counsel for The Cigna Group beginning September 2023; Executive Vice President and General Counsel of The Cigna Group from June 2011 to September 2023; Senior Vice President and General Counsel of Lincoln Financial Group from May 2010 until June 2011; Vice President and Deputy General Counsel of The Cigna Group from April 2008 until May 2010; and Corporate Secretary from September 2006 until April 2010.
JONES, 55, Executive Vice President, Chief Administrative Officer and General Counsel for The Cigna Group beginning September 2023; Executive Vice President and General Counsel of The Cigna Group from June 2011 until September 2023; Senior Vice President and General Counsel of Lincoln Financial Group from May 2010 until June 2011; Vice President and Deputy General Counsel of The Cigna Group from April 2008 until May 2010; and Corporate Secretary from September 2006 until April 2010.
Individual Business from August 2013 to November 2017. NICOLE S.
Individual Business from August 2013 until November 2017. NICOLE S.
Item 4. MINE SAFETY DISCLOSURES Not applicable. Information about Our Executive Officers The principal occupations, ages and employment histories of our executive officers (as of February 27, 2025) are listed below.
Item 4. MINE SAFETY DISCLOSURES Not applicable. Information about Our Executive Officers The principal occupations, ages and employment histories of our executive officers (as of February 26, 2026) are listed below. DAVID M.
CORDANI, 59, Chairman of the Board of The Cigna Group beginning January 2022; Chief Executive Officer beginning December 2009; Director beginning October 2009; President beginning June 2008; and Chief Operating Officer from June 2008 until December 2009. NOELLE K.
CORDANI, 60, Chairman of the Board of The Cigna Group beginning January 2022; Chief Executive Officer beginning December 2009; Director beginning October 2009; President beginning June 2008; and Chief Operating Officer from June 2008 until December 2009. ANN M.
BRIAN C. EVANKO, 48, Executive Vice President and Chief Financial Officer of The Cigna Group and President and Chief Executive Officer of Cigna Healthcare beginning January 2024; Executive Vice President and Chief Financial Officer of The Cigna Group from January 2021 to January 2024; President, Government Business from November 2017 to January 2021; and President, U.S.
BRIAN EVANKO, 49, President and Chief Operating Officer of The Cigna Group beginning March 2025; Executive Vice President and Chief Financial Officer of The Cigna Group and President and Chief Executive Officer of Cigna Healthcare from January 2024 until March 2025; Executive Vice President and Chief Financial Officer of The Cigna Group from January 2021 until January 2024; President, Government Business from November 2017 until January 2021; and President, U.S.
Removed
DAVID BRAILER, 65, Executive Vice President, Chief Health Officer and Chief Transformation Officer of The Cigna Group beginning January 2025; Executive Vice President and Chief Health Officer of The Cigna Group from September 2022 to January 2025; Founder of Health Evolution Partners in 2007; and Chairman of Health Evolution beginning in 2011. DAVID M.
Added
DURGA PRASAD KOKA, 52, Executive Vice President and Global Chief Information Officer, The Cigna Group beginning September 2025; Senior Vice President, Information Technology from October 2021 until September 2025; SVP of Enterprise Solutions and Architecture, Hilton Worldwide from May 2020 until May 2021. F.
Removed
EDER, 55, Executive Vice President and Global Chief Information Officer of The Cigna Group beginning September 2020, with responsibility for the Company's technology and operations function beginning September 2023; Executive Vice President, 35 Chief Information and Digital Officer at Hilton Worldwide Holdings from March 2018 until August 2020; Executive Vice President, Chief Card Customer Experience Officer at Capital One Financial Corporation from November 2016 until 2018; and Executive Vice President, Customer Experience and Operations at Capital One Financial Corporation from September 2014 until November 2016.
Added
EVERETT NEVILLE, 61, Executive Vice President, Strategy and Business Development beginning January 2021; Senior Vice President, Value Creation and Solutions from August 1998 until December 2020. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table provides information about The Cigna Group share repurchase activity for the quarter ended December 31, 2024: Period Total # of shares purchased (1) Average price paid per share (1) Total # of shares purchased as part of publicly announced program (2) Approximate dollar value of shares that may yet be purchased as part of publicly announced program (3) (in millions) October 1-31, 2024 2,282,397 $ 331.72 2,281,772 $ 5,543 November 1-30, 2024 2,604,182 $ 328.12 2,600,639 $ 4,698 December 1-31, 2024 1,281,606 $ 321.93 1,281,010 $ 10,289 Total 6,168,185 $ 328.17 6,163,421 N/A (1) Includes shares tendered by employees under the Company's equity compensation plans as follows: 1) payment of taxes on vesting of restricted stock (grants and units) and strategic performance shares and 2) payment of the exercise price and taxes for certain stock options exercised.
Biggest changeThe stock performance shown in the graph is not intended to forecast or be indicative of future performance. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 The Cigna Group $ 100 $ 112 $ 165 $ 152 $ 142 $ 145 S&P 500 $ 100 $ 129 $ 105 $ 133 $ 166 $ 196 S&P 500 Health Care Index $ 100 $ 126 $ 124 $ 126 $ 129 $ 148 * Assumes that the value of the investment in The Cigna Group common stock and each index was $100 on December 31, 2020 and that all dividends were reinvested. 35 Issuer Purchases of Equity Securities The following table provides information about The Cigna Group share repurchase activity for the quarter ended December 31, 2025: Period Total # of shares purchased (1) Average price paid per share (1) (3) Total # of shares purchased as part of publicly announced program (2) Approximate dollar value of shares that may yet be purchased as part of publicly announced program (3) (in millions) October 1 - 31, 2025 1,688 $ 304.63 — $ 7,732 November 1 - 30, 2025 3,738,069 $ 268.25 3,732,646 $ 6,730 December 1 - 31, 2025 3,057 $ 274.35 — $ 6,730 Total 3,742,814 $ 268.27 3,732,646 N/A (1) Includes shares tendered by employees under the Company's equity compensation plans as follows: 1) payment of taxes on vesting of restricted stock (grants and units) and strategic performance shares and 2) payment of the exercise price and taxes for certain stock options exercised.
The Cigna Group currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information on dividend payments.
The Cigna Group currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that 34 the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information on dividend payments.
For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." 36 Stock Price Performance Graph The graph below compares the cumulative total shareholder return on our common stock for the five years ended December 31, 2024 with the cumulative total return of the Standard & Poor's ("S&P") 500 Index and the S&P 500 Health Care Index.
For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." Stock Price Performance Graph The graph below compares the cumulative total shareholder return on our common stock for the five years ended December 31, 2025 with the cumulative total return of the Standard & Poor's ("S&P") 500 Index and the S&P 500 Health Care Index.
The Cigna Group's common stock is listed with, and trades on, the New York Stock Exchange under the symbol "CI." In 2024, 2023 and 2022, The Cigna Group declared and paid quarterly cash dividends of $1.40, $1.23 and $1.12 per share of The Cigna Group common stock, respectively.
The Cigna Group's common stock is listed with, and trades on, the New York Stock Exchange under the symbol "CI." In 2025, 2024 and 2023, The Cigna Group declared and paid quarterly cash dividends of $1.51, $1.40 and $1.23 per share of The Cigna Group common stock, respectively.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of December 31, 2024, the number of shareholders of record was 21,974.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of December 31, 2025, the number of shareholders of record was 20,669.
Employees tendered 625 shares in October, 3,543 shares in November and 596 shares in December 2024. (2) Additionally, the Company maintains a share repurchase program authorized by the Board. Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital.
Employees tendered 1,688 shares in October, 5,423 shares in November and 3,057 shares in December 2025. (2) Additionally, the Company maintains a share repurchase program authorized by the Board. Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital.
On January 30, 2025, the Board of Directors declared the first quarter cash dividend of $1.51 per share of The Cigna Group common stock to be paid on March 20, 2025 to shareholders of record on March 5, 2025.
On February 5, 2026, the Board of Directors declared the first quarter 2026 cash dividend of $1.56 per share of The Cigna Group common stock to be paid on March 19, 2026 to shareholders of record on March 5, 2026.
(3) Approximate dollar value of shares is as of the last date of the applicable month and excludes the impact of excise tax. 37 Item 6. [Reserved]
The program may be suspended or discontinued at any time and does not have an expiration date. (3) The average price paid per share and approximate dollar value of shares exclude the impact of excise tax. Item 6. [Reserved]
Removed
The stock performance shown in the graph is not intended to forecast or be indicative of future performance. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 The Cigna Group $ 100 $ 102 $ 114 $ 168 $ 154 $ 145 S&P 500 $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 S&P 500 Health Care Index $ 100 $ 113 $ 143 $ 140 $ 143 $ 147 * Assumes that the value of the investment in The Cigna Group common stock and each index was $100 on December 31, 2019 and that all dividends were reinvested.
Removed
The program may be suspended or discontinued at any time and does not have an expiration date. In December 2024, the Board increased repurchasing authority by an additional $6.0 billion. From January 1, 2025 through February 26, 2025, the Company repurchased 3.0 million shares for approximately $901 million, leaving repurchase authority at $9.4 billion as of February 26, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor further information on our business and strategy, see Part I, Item 1 "Business" of this Form 10-K. 38 Financial Highlights Consolidated Results of Operations (GAAP basis) For the Years Ended December 31, Change Change (Dollars in millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Pharmacy revenues $ 185,362 $ 137,243 $ 128,566 $ 48,119 35 % $ 8,677 7 % Premiums 45,996 44,237 39,916 1,759 4 4,321 11 Fees and other revenues 14,790 12,619 10,881 2,171 17 1,738 16 Net investment income 973 1,166 1,155 (193) (17) 11 1 Total revenues 247,121 195,265 180,518 51,856 27 14,747 8 Pharmacy and other service costs 182,509 133,801 124,834 48,708 36 8,967 7 Medical costs and other benefit expenses 38,648 36,287 32,184 2,361 7 4,103 13 Selling, general and administrative expenses 14,844 14,822 13,174 22 — 1,648 13 Amortization of acquired intangible assets 1,703 1,819 1,876 (116) (6) (57) (3) Total benefits and expenses 237,704 186,729 172,068 50,975 27 14,661 9 Income from operations 9,417 8,536 8,450 881 10 86 1 Interest expense and other (1,435) (1,446) (1,228) 11 (1) (218) 18 Net gain (loss) on sale of businesses 24 (1,499) 1,662 1,523 N/M (3,161) N/M Net investment losses (2,737) (78) (487) (2,659) N/M 409 (84) Income before income taxes 5,269 5,513 8,397 (244) (4) (2,884) (34) Total income taxes 1,491 141 1,615 1,350 N/M (1,474) (91) Net income 3,778 5,372 6,782 (1,594) (30) (1,410) (21) Less: Net income attributable to noncontrolling interests 344 208 78 136 65 130 167 Shareholders' net income $ 3,434 $ 5,164 $ 6,704 $ (1,730) (34) % $ (1,540) (23) % Consolidated effective tax rate 28.3 % 2.6 % 19.2 % 2,570 bps (1,660) bps Medical customers (in thousands) 19,147 19,780 18,004 (633) (3) % 1,776 10 % 39 Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations For the Years Ended December 31, 2024 2023 2022 (In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Shareholders' net income $ 3,434 $ 5,164 $ 6,704 Adjustments to reconcile to adjusted income from operations Net investment losses (1) $ 2,533 2,529 $ 135 114 $ 613 496 Amortization of acquired intangible assets 1,703 1,347 1,819 1,413 1,876 1,345 Special items Integration and transaction-related costs 275 211 45 35 135 103 Impairment of dividend receivable 182 138 — — — — Deferred tax expenses (benefits), net — 84 — (1,071) — — Net (gain) loss on sale of businesses (24) (2) 1,499 1,429 (1,662) (1,332) Charge for organizational efficiency plan — — 252 193 22 17 Charges (benefits) associated with litigation matters — — 201 171 (28) (20) Total special items $ 433 431 $ 1,997 757 $ (1,533) (1,232) Adjusted income from operations $ 7,741 $ 7,448 $ 7,313 (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Biggest changeFinancial Highlights Consolidated Results of Operations (GAAP basis) For the Years Ended December 31, Change Change (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Pharmacy revenues $ 216,672 $ 185,362 $ 137,243 $ 31,310 17 % $ 48,119 35 % Premiums 40,261 45,996 44,237 (5,735) (12) 1,759 4 Fees and other revenues 16,921 14,790 12,619 2,131 14 2,171 17 Net investment income 1,046 973 1,166 73 8 (193) (17) Total revenues 274,900 247,121 195,265 27,779 11 51,856 27 Pharmacy and other service costs 214,991 182,509 133,801 32,482 18 48,708 36 Medical costs and other benefit expenses 34,349 38,648 36,287 (4,299) (11) 2,361 7 Selling, general and administrative expenses 14,617 14,844 14,822 (227) (2) 22 — Amortization of acquired intangible assets 1,743 1,703 1,819 40 2 (116) (6) Total benefits and expenses 265,700 237,704 186,729 27,996 12 50,975 27 Income from operations 9,200 9,417 8,536 (217) (2) 881 10 Interest expense and other (1,408) (1,435) (1,446) 27 (2) 11 (1) Net gain (loss) on sale of businesses 13 24 (1,499) (11) (46) 1,523 N/M Net investment losses (24) (2,737) (78) 2,713 (99) (2,659) N/M Income before income taxes 7,781 5,269 5,513 2,512 48 (244) (4) Total income taxes 1,493 1,491 141 2 — 1,350 N/M Net income 6,288 3,778 5,372 2,510 66 (1,594) (30) Less: Net income attributable to noncontrolling interests 331 344 208 (13) (4) 136 65 Shareholders' net income $ 5,957 $ 3,434 $ 5,164 $ 2,523 73 % $ (1,730) (34) % Consolidated effective tax rate 19.2 % 28.3 % 2.6 % (910) bps 2,570 bps Medical customers (in thousands) 18,118 19,147 19,780 (1,029) (5) % (633) (3) % 37 Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations For the Years Ended December 31, 2025 2024 2023 (In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Shareholders' net income $ 5,957 $ 3,434 $ 5,164 Adjustments to reconcile to adjusted income from operations Net investment (gains) losses (1) $ (225) (90) $ 2,533 2,529 $ 135 114 Amortization of acquired intangible assets 1,743 1,325 1,703 1,347 1,819 1,413 Special items Strategic optimization program 749 565 — — — — Deferred tax expenses (benefits), net — 427 — 84 — (1,071) Integration and transaction-related costs 327 247 275 211 45 35 (Benefits) charges associated with litigation matters (17) (13) — — 201 171 Net (gain) loss on sale of businesses (13) (404) (24) (2) 1,499 1,429 Impairment of dividend receivable — — 182 138 — — Charge for organizational efficiency plan — — — — 252 193 Total special items $ 1,046 822 $ 433 431 $ 1,997 757 Adjusted income from operations $ 8,014 $ 7,741 $ 7,448 (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Cash requirements at the parent company level generally consist of debt service; payment of declared dividends to shareholders; lending to subsidiaries as needed; and pension plan funding.
Parent Company Level. Cash requirements at the parent company level generally consist of debt service, payment of declared dividends to shareholders, lending to subsidiaries as needed and pension plan funding.
We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary; (ii) pay dividends to shareholders; (iii) consider acquisitions and investments that are strategically and economically advantageous; and (iv) return capital to shareholders through share repurchases.
We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary; (ii) pay dividends to shareholders; (iii) consider acquisitions 45 and investments that are strategically and economically advantageous; and (iv) return capital to shareholders through share repurchases.
Risks to Liquidity and Capital Resources Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section of this Form 10-K.
Risks to Liquidity and Capital Resources Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in this Form 10-K.
The factors that could impact our estimates of uncertain tax positions include the likelihood of sustaining our tax position (and related assumed interest and penalties) under audit. If our positions are upheld upon audit, our net income would increase. Income Taxes - Valuation Allowance Nature of Critical Accounting Estimate.
The factors that could impact our estimates of uncertain tax positions include the likelihood of 48 sustaining our tax position (and related assumed interest and penalties) under audit. If our positions are upheld upon audit, our net income would increase. Income Taxes - Valuation Allowance Nature of Critical Accounting Estimate.
The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments; collecting dividends from its subsidiaries; using proceeds from issuing debt and common stock; and borrowing from its subsidiaries, subject to applicable regulatory limits. 42 Regulatory Restrictions.
The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments, collecting dividends from its subsidiaries, using proceeds from issuing debt and common stock, and borrowing from its subsidiaries, subject to applicable regulatory limits. Regulatory Restrictions.
Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business.
Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future 36 underlying performance of the business.
Future cash flows for the Evernorth Health Services reporting units are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates. Future cash flows for our other reporting units are primarily driven by forecasted revenues, benefit expenses, operating expenses and long- 45 term growth rates.
Future cash flows for the Evernorth Health Services reporting units are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates. Future cash flows for our other reporting units are primarily driven by forecasted revenues, benefit expenses, operating expenses and long-term growth rates.
We cannot reasonably estimate the timing of such future payments. See Note 20 to the Consolidated Financial Statements for additional information on uncertain tax positions. Off-Balance Sheet : Purchase Obligations. These include agreements to purchase goods or services that are enforceable and legally binding.
We cannot reasonably estimate the timing of such future payments. See Note 21 to the Consolidated Financial Statements for additional information on uncertain tax positions. Off-Balance Sheet : Purchase Obligations. These include agreements to purchase goods or services that are enforceable and legally binding.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating the financial condition of The Cigna Group as of December 31, 2024 compared with December 31, 2023 and our results of operations for 2024 compared with 2023 and 2022 and is intended to help you understand the ongoing trends in our business.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating the financial condition of The Cigna Group as of December 31, 2025 compared with December 31, 2024 and our results of operations for 2025 compared with 2024 and 2023 and is intended to help you understand the ongoing trends in our business.
In the event we are unable to sustain all of our $1.5 billion of uncertain tax positions, it could result in future tax payments of approximately $1.0 billion. We are adequately reserved for such positions. As a result, there is minimal direct risk to earnings should we fail to sustain our positions.
In the event we are unable to sustain all of our $1.5 billion of uncertain tax positions, it could result in future tax payments of approximately $1.2 billion. We are adequately reserved for such positions. As a result, there is minimal direct risk to earnings should we fail to sustain our positions.
We completed our normal annual evaluations for impairment of goodwill and intangible assets during the third quarter of 2024. The evaluations support that as of December 31, 2024, the fair value estimates of our reporting units exceed their carrying values by substantial margins.
We completed our normal annual evaluations for impairment of goodwill and intangible assets during the third quarter of 2025. The evaluations support that as of December 31, 2025, the fair value estimates of our reporting units exceed their carrying values by substantial margins.
Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 19 to the Consolidated Financial Statements in this Form 10-K for additional information regarding these restrictions.
Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 20 to the Consolidated Financial Statements in this Form 10-K for additional information regarding these restrictions.
Guarantees and Contractual Obligations We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 21 to the Consolidated Financial Statements for discussion of various guarantees. On Balance Sheet : Long-Term Debt.
Guarantees and Contractual Obligations We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 22 to the Consolidated Financial Statements for discussion of various guarantees. On Balance Sheet : Long-Term Debt.
See Note 20 to the Consolidated Financial Statements for additional discussion around uncertain tax positions and the Liquidity and Capital Resources section of this MD&A for a discussion of their potential impact on liquidity. Effect if Different Assumptions Used.
See Note 21 to the Consolidated Financial Statements for additional discussion around uncertain tax positions and the Liquidity and Capital Resources section of this MD&A for a discussion of their potential impact on liquidity. Effect if Different Assumptions Used.
For comparisons of our results of operations for 2023 compared with 2022, please refer to the previously filed MD&A included in Part II, Item 7 of our Form 10-K for the year ended December 31, 2023.
For comparisons of our results of operations for 2024 compared with 2023, please refer to the previously filed MD&A included in Part II, Item 7 of our Form 10-K for the year ended December 31, 2024.
See Note 22 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues.
See Note 23 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues.
Changes in assumptions concerning future financial results or other underlying assumptions, including macroeconomic factors, government legislation, changes in the competitive landscape or other market conditions, could impact our ability to achieve profitability projections.
Changes in assumptions concerning future financial results or other underlying assumptions, including macroeconomic factors, government legislation, changes in the competitive landscape or other market conditions (including business models), could impact our ability to achieve profitability projections.
Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.
Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.
Capital Resources Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, credit agreements and the issuance of long-term debt and equity securities.
Capital Resources Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities.
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums, fees, investment income, taxes, benefit costs and other expenses.
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums and medical costs, fees, investment income, taxes, and other expenses.
As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of December 31, 2024.
As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of December 31, 2025.
These investments were comprised of approximately 75% debt securities, including government and corporate debt diversified by issuer, industry and geography; 15% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the joint venture's investment strategy and its execution.
These investments were comprised of approximately 70% debt securities, including government and corporate debt diversified by issuer, industry and geography; 20% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the joint venture's investment strategy and its execution.
Additionally, the current macroeconomic headwinds are impacting capital markets and reducing investor appetite for capital-intensive assets (e.g., offices and regional shopping malls). Our commercial mortgage loan portfolio has no exposure to regional shopping malls and approximately 25% exposure to office properties.
Additionally, the current macroeconomic headwinds 50 are impacting capital markets and reducing investor appetite for capital-intensive assets (e.g., offices and regional shopping malls). Our commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 25% exposure to office properties.
The effect of these hypothetical changes in market rates or prices on the fair value of certain noninsurance financial instruments would have been as follows: Market scenario for certain noninsurance financial instruments Loss in Fair Value (in billions) December 31, 2024 December 31, 2023 100 basis point increase in interest rates (excluding the Company's long-term debt) $ 0.6 $ 0.7 In the event of a hypothetical 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $1.8 billion at both December 31, 2024 and December 31, 2023.
The effect of these hypothetical changes in market rates or prices on the fair value of certain noninsurance financial instruments would have been as follows: Market scenario for certain noninsurance financial instruments Loss in Fair Value (in billions) December 31, 2025 December 31, 2024 100 basis point increase in interest rates (excluding the Company's long-term debt) $ 0.5 $ 0.6 In the event of a hypothetical 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $2.1 billion at December 31, 2025 and $1.8 billion at December 31, 2024.
As of December 31, 2024, purchase obligations consisted of a total of $4.2 billion of estimated payments required under contractual arrangements (of which we expect $1.6 billion of purchase obligations to be paid within the next 12 months beginning January 1, 2025).
As of December 31, 2025, purchase obligations consisted of a total of $6.3 billion of estimated payments required under contractual arrangements (of which we expect $2.1 billion of purchase obligations to be paid within the next 12 months beginning January 1, 2026).
Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.- regulated subsidiaries were $2.4 billion for the year ended December 31, 2024 and $1.2 billion for the year ended December 31, 2023.
Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.9 billion for the year ended December 31, 2025 and $2.4 billion for the year ended December 31, 2024.
Commercial Mortgage Loans As of December 31, 2024, our $1.4 billion commercial mortgage loan portfolio consisted of approximately 45 fixed-rate loans, diversified by property type, location and borrower. These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses.
Commercial Mortgage Loans As of December 31, 2025, our $1.2 billion commercial mortgage loan portfolio consisted of approximately 40 fixed-rate loans, diversified by property type, location and borrower. These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses.
Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years. As of December 31, 2024, $8.1 billion, or 86%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.3 billion were below investment grade.
Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years. As of December 31, 2025, $7.3 billion, or 87%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.1 billion were below investment grade.
See Note 11 of the Consolidated Financial Statements for additional information on investment commitments. • $1.5 billion of future service commitments (of which we expect $0.7 billion of the committed amounts to be disbursed in 2025), primarily comprised of contracts for certain outsourced business processes and information technology maintenance and support.
See Note 11 of the Consolidated Financial Statements for additional information on investment commitments. • $3.1 billion of future service commitments (of which we expect $1.1 billion of the committed amounts to be disbursed in 2026), primarily comprised of contracts for information technology maintenance and support and certain outsourced business processes.
Unconsolidated Subsidiary Investments Portfolio We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under the equity method of accounting. Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $15.6 billion as of December 31, 2024.
Unconsolidated Subsidiary Investments Portfolio We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under the equity method of accounting. Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $18.2 billion as of December 31, 2025.
There were no investments with a material unrealized loss as of December 31, 2024. See Note 14 to the Consolidated Financial Statements for additional information regarding unconsolidated subsidiaries. 53 MARKET RISK Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices.
There were no investments with a material unrealized loss as of December 31, 2025. See Note 14 to the Consolidated Financial Statements in this Form 10-K for additional information regarding unconsolidated subsidiaries. MARKET RISK Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices.
Balances that are included in the Consolidated Balance Sheets within Accrued expenses and other liabilities were $1,477 million and $1,399 million as of December 31, 2024 and December 31, 2023, respectively.
Balances that are included in the Consolidated Balance Sheets within Accrued expenses and other liabilities were $1,538 million and $1,477 million as of December 31, 2025 and 2024, respectively.
Valuation allowances that are included in the Consolidated Balance Sheets within Deferred tax liabilities, net were $2,332 million and $1,498 million as of December 31, 2024 and December 31, 2023, respectively. See Note 20 to the Consolidated Financial Statements for additional discussion around valuation allowances. Effect if Different Assumptions Used.
Valuation allowances that are included in the Consolidated Balance Sheets within Deferred tax liabilities, net were $2,374 million and $2,332 million as of December 31, 2025 and 2024, respectively. See Note 21 to the Consolidated Financial Statements for additional discussion around valuation allowances. Effect if Different Assumptions Used.
See Note 22 to the Consolidated Financial Statements for further details. 50 2024 versus 2023 Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
See Note 23 to the Consolidated Financial Statements for further details. 2025 versus 2024 Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Other Long-Term Investments Other long-term investments of $4.6 billion as of December 31, 2024 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures and other deposit activity that is required to support various insurance and health services businesses.
Other Long-Term Investments Other long-term investments of $5.0 billion as of December 31, 2025 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures, and other deposit activity that is required to support various insurance and health services businesses.
As of December 31, 2024, we had $6.5 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $5.6 billion of 43 remaining capacity under our commercial paper program and $7.6 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain nonregulated subsidiaries.
As of December 31, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $7.9 billion in cash and short-term investments, approximately $0.9 billion of which was held by the parent company or certain non-regulated subsidiaries.
Unpaid claims and claim expenses for the Cigna Healthcare segment, both gross and net of reinsurance and other recoverables, as of December 31, 2024 were $5,018 million gross and $4,859 million net and as of December 31, 2023 were $5,092 million gross and $4,856 million net.
Unpaid claims and claim expenses for the Cigna Healthcare segment, both gross and net of reinsurance and other recoverables, as of December 31, 2025 were $4,241 million gross and $4,094 million net and as of December 31, 2024 were $5,018 million gross and $4,859 million net.
See Note 2 to the Consolidated Financial Statements included in this Form 10-K for additional information on revenue and cost-recognition policies for this segment. • Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services. • Higher medical costs (also referred to as higher medical cost trend) is impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services. • Prior to the divestiture of our Medicare Advantage and related businesses to HCSC, the percentage of Medicare Advantage customers in bonus-eligible plans impacts the amount of quality bonus payments we receive. • MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates.
See Note 2 to the Consolidated Financial Statements included in this Form 10-K for additional information on revenue and cost recognition policies for this segment. • Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services. • Higher medical costs (also referred to as higher medical cost trend) are impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services. 42 • MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates.
Excluding amounts classified as held for sale, Goodwill and other intangibles as of December 31, 2024 were $44,370 million and $29,417 million, respectively, and as of December 31, 2023, were $44,259 million and $30,863 million, respectively. See Note 18 to the Consolidated Financial Statements for additional discussion of our goodwill and other intangible assets. Effect if Different Assumptions Used.
Goodwill and Other intangible assets as of December 31, 2025 were $44,924 million and $28,560 million, respectively, and as of December 31, 2024, were $44,370 million and $29,417 million, respectively, excluding amounts classified as held for sale. See Note 19 to the Consolidated Financial Statements for additional discussion of our goodwill and other intangibles. Effect if Different Assumptions Used.
There may be a number of alternative inputs to select based on an understanding of the issuer, the structure of the security and overall market conditions. In addition, these factors are inherently variable in nature as they change frequently in response to market conditions. Approximately 60% of our debt securities are public securities and approximately 40% are private placement securities.
There may be a number of alternative inputs to select based on an understanding of the issuer, the structure of the security and overall market conditions. In addition, these factors are inherently variable in nature as they change frequently in response to market conditions.
Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented in this Form 10-K. We regularly evaluate items that may impact critical accounting estimates.
Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented in this Form 10-K.
Effect of Market Fluctuations We determine the sensitivity of market risk for our fixed income financial instruments, including debt securities and commercial mortgage loans, by estimating the present value of future cash flows using duration modeling and applying a 100 basis point increase in interest rates.
See Note 11 to the Consolidated Financial Statements for additional information about derivative financial instruments. 51 Effect of Market Fluctuations We determine the sensitivity of market risk for our fixed income financial instruments, including debt securities and commercial mortgage loans, by estimating the present value of future cash flows using duration modeling and applying a 100 basis point increase in interest rates.
Cash flows for the years ended December 31 were as follows: For the Years Ended December 31, (In millions) 2024 2023 2022 Operating activities $ 10,363 $ 11,813 $ 8,656 Investing activities $ (2,102) $ (5,174) $ 3,098 Financing activities $ (7,647) $ (4,294) $ (11,240) The following discussion explains variances in the various categories of cash flows for the year ended December 31, 2024 compared with the same period in 2023.
Cash flows for the years ended December 31 were as follows: For the Years Ended December 31, (In millions) 2025 2024 2023 Operating activities $ 9,601 $ 10,363 $ 11,813 Investing activities $ (4,407) $ (2,102) $ (5,174) Financing activities $ (6,421) $ (7,647) $ (4,294) The following discussion explains variances in the various categories of cash flows for the year ended December 31, 2025 compared with the same period in 2024.
A 100 basis point increase in the medical cost trend rate would increase this liability by approximately $110 million, resulting in a decrease in net income of approximately $85 million after-tax, and a 50 basis point decrease in completion factors would increase this liability by approximately $185 million, resulting in a decrease in net income of approximately $145 million after-tax.
A 100 basis point increase in the medical cost trend rate would increase this liability by approximately $115 million, resulting in a decrease in net income of approximately $90 million after-tax, and a 50 basis point decrease in completion factors would increase this liability by approximately $180 million, resulting in a decrease in net income of approximately $140 million after-tax.
Shorter-term investments generally support shorter-term life and health liabilities. Medium-term, fixed-rate investments support interest-sensitive and medium-term health liabilities. Longer-term investments generally support products with longer payout periods such as annuities. • Use of derivatives. We use derivative financial instruments to reduce our primary market risks. See Note 11 to the Consolidated Financial Statements for additional information about derivative financial instruments.
Shorter-term investments generally support shorter-term life and health liabilities. Medium-term, fixed-rate investments support interest-sensitive and medium-term health liabilities. Longer-term investments generally support products with longer payout periods such as annuities. • Use of derivatives. We use derivative financial instruments to reduce our primary market risks.
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.8% and 40.1% at December 31, 2024 and 2023, respectively. We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy. Subsidiary Borrowings.
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.0% and 43.8% as of December 31, 2025 and 2024, respectively. We actively monitor our debt obligations and engage in issuance and repayment activities as needed in accordance with our capital management strategy.
In addition to the estimates described below, the Notes to the Consolidated Financial Statements describe other estimates that management has made in preparation of the financial statements. Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate.
We regularly evaluate items that may impact critical accounting estimates. 47 In addition to the estimates described below, the Notes to the Consolidated Financial Statements describe other estimates that management has made in preparation of the financial statements. Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate.
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations For the Years Ended December 31, 2024 2023 2022 (Diluted earnings per share) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Shareholders' net income $ 12.12 $ 17.39 $ 21.41 Adjustments to reconcile to adjusted income from operations Net investment losses (1) $ 8.95 8.93 $ 0.45 0.38 $ 1.96 1.59 Amortization of acquired intangible assets 6.01 4.76 6.13 4.77 5.99 4.30 Special items Integration and transaction-related costs 0.97 0.75 0.15 0.12 0.43 0.33 Impairment of dividend receivable 0.64 0.49 — — — — Deferred tax expenses (benefits), net — 0.30 — (3.61) — — Net (gain) loss on sale of businesses (0.08) (0.02) 5.05 4.81 (5.31) (4.26) Charge for organizational efficiency plan — — 0.85 0.65 0.07 0.05 Charges (benefits) associated with litigation matters — — 0.68 0.58 (0.09) (0.06) Total special items $ 1.53 1.52 $ 6.73 2.55 $ (4.90) (3.94) Adjusted income from operations $ 27.33 $ 25.09 $ 23.36 (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income. 40 Financial highlights by segment For the Years Ended December 31, Change Change (Dollars in millions, except per share amounts) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenues Adjusted revenues by segment Evernorth Health Services $ 202,155 $ 153,499 $ 140,335 32 % 9 % Cigna Healthcare 52,914 51,205 45,037 3 14 Other Operations 828 596 2,263 39 (74) Corporate, net of eliminations (8,798) (9,978) (6,991) (12) 43 Adjusted revenues 247,099 195,322 180,644 27 8 Net investment results from certain equity method investments 204 (57) (126) N/M (55) Special item related to impairment of dividend receivable (182) — — N/M N/M Total revenues $ 247,121 $ 195,265 $ 180,518 27 % 8 % Shareholders' net income $ 3,434 $ 5,164 $ 6,704 (34) % (23) % Adjusted income from operations $ 7,741 $ 7,448 $ 7,313 4 % 2 % Earnings per share (diluted) Shareholders' net income $ 12.12 $ 17.39 $ 21.41 (30) % (19) % Adjusted income from operations $ 27.33 $ 25.09 $ 23.36 9 % 7 % Pre-tax adjusted income (loss) from operations by segment Evernorth Health Services $ 7,001 $ 6,442 $ 6,127 9 % 5 % Cigna Healthcare 4,229 4,478 4,099 (6) 9 Other Operations (9) 96 509 N/M (81) Corporate, net of eliminations (1,688) (1,698) (1,466) (1) 16 Consolidated pre-tax adjusted income from operations 9,533 9,318 9,269 2 1 Income attributable to noncontrolling interests 405 146 84 177 74 Net investment (losses) (1) (2,533) (135) (613) N/M (78) Amortization of acquired intangible assets (1,703) (1,819) (1,876) (6) (3) Special items (433) (1,997) 1,533 (78) N/M Income before income taxes $ 5,269 $ 5,513 $ 8,397 (4) % (34) % (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations For the Years Ended December 31, 2025 2024 2023 (Diluted earnings per share) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Shareholders' net income $ 22.18 $ 12.12 $ 17.39 Adjustments to reconcile to adjusted income from operations Net investment (gains) losses (1) $ (0.84) (0.34) $ 8.95 8.93 $ 0.45 0.38 Amortization of acquired intangible assets 6.50 4.94 6.01 4.76 6.13 4.77 Special items Strategic optimization program 2.78 2.10 — — — — Deferred tax expenses (benefits), net — 1.59 — 0.30 — (3.61) Integration and transaction-related costs 1.22 0.92 0.97 0.75 0.15 0.12 (Benefits) charges associated with litigation matters (0.06) (0.05) — — 0.68 0.58 Net (gain) loss on sale of businesses (0.05) (1.50) (0.08) (0.02) 5.05 4.81 Impairment of dividend receivable — — 0.64 0.49 — — Charge for organizational efficiency plan — — — — 0.85 0.65 Total special items $ 3.89 3.06 $ 1.53 1.52 $ 6.73 2.55 Adjusted income from operations $ 29.84 $ 27.33 $ 25.09 (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income. 38 Financial highlights by segment For the Years Ended December 31, Change Change (Dollars in millions, except per share amounts) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Revenues Adjusted revenues by segment Evernorth Health Services $ 234,953 $ 202,155 $ 153,499 16 % 32 % Cigna Healthcare 47,163 52,914 51,205 (11) 3 Other Operations 674 828 596 (19) 39 Corporate, net of eliminations (8,139) (8,798) (9,978) (7) (12) Adjusted revenues 274,651 247,099 195,322 11 27 Net investment results from certain equity method investments 249 204 (57) 22 N/M Special item related to impairment of dividend receivable — (182) — N/M N/M Total revenues $ 274,900 $ 247,121 $ 195,265 11 % 27 % Shareholders' net income $ 5,957 $ 3,434 $ 5,164 73 % (34) % Adjusted income from operations $ 8,014 $ 7,741 $ 7,448 4 % 4 % Earnings per share (diluted) Shareholders' net income $ 22.18 $ 12.12 $ 17.39 83 % (30) % Adjusted income from operations $ 29.84 $ 27.33 $ 25.09 9 % 9 % Pre-tax adjusted income (loss) from operations by segment Evernorth Health Services $ 7,221 $ 7,001 $ 6,442 3 % 9 % Cigna Healthcare 4,153 4,229 4,478 (2) (6) Other Operations 89 (9) 96 N/M N/M Corporate, net of eliminations (1,593) (1,688) (1,698) (6) (1) Consolidated pre-tax adjusted income from operations 9,870 9,533 9,318 4 2 Income attributable to noncontrolling interests 475 405 146 17 177 Net investment gains (losses) (1) 225 (2,533) (135) N/M N/M Amortization of acquired intangible assets (1,743) (1,703) (1,819) 2 (6) Special items (1,046) (433) (1,997) 142 (78) Income before income taxes $ 7,781 $ 5,269 $ 5,513 48 % (4) % (1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
This includes the following: • $2.7 billion of investment commitments (of which we expect $0.9 billion of the committed amounts to be disbursed in 2025).
This includes the following: • $3.2 billion of investment commitments (of which we expect $1.0 billion of the committed amounts to be disbursed in 2026).
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Adjusted revenues (1) $ 52,914 $ 51,205 $ 45,037 $ 1,709 3 % $ 6,168 14 % Pre-tax adjusted income from operations (1) $ 4,229 $ 4,478 $ 4,099 $ (249) (6) % $ 379 9 % Pre-tax margin (1)(2) 8.0 % 8.7 % 9.1 % (70) bps (40) bps Medical care ratio 83.2 % 81.3 % 81.7 % 190 bps (40) bps SG&A expense ratio (3) 20.4 % 21.6 % 21.8 % (120) bps (20) bps (1) See Note 22 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Adjusted revenues (1) $ 47,163 $ 52,914 $ 51,205 $ (5,751) (11) % $ 1,709 3 % Pre-tax adjusted income from operations (1) $ 4,153 $ 4,229 $ 4,478 $ (76) (2) % $ (249) (6) % Pre-tax margin (1)(2) 8.8 % 8.0 % 8.7 % 80 bps (70) bps Medical care ratio 84.4 % 83.2 % 81.3 % 120 bps 190 bps SG&A expense ratio (3) 20.2 % 20.4 % 21.6 % (20) bps (120) bps (1) See Note 23 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
These include other long-term liabilities reflected in our Consolidated Balance Sheets as of December 31, 2024, including obligations associated with other postretirement and postemployment benefit obligations, reinsurance liabilities, supplemental and deferred compensation plans, and interest rate and foreign currency swap contracts. Uncertain Tax Positions.
These include other long-term liabilities reflected in our Consolidated Balance Sheets as of December 31, 2025, including obligations associated with other postretirement and postemployment benefit obligations, reinsurance liabilities, supplemental and deferred compensation plans, and derivative financial instruments. Uncertain Tax Positions.
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Adjusted revenues (1) $ 202,155 $ 153,499 $ 140,335 $ 48,656 32 % $ 13,164 9 % Pre-tax adjusted income from operations (1) $ 7,001 $ 6,442 $ 6,127 $ 559 9 % $ 315 5 % Pre-tax margin (1)(2) 3.5 % 4.2 % 4.4 % (70) bps (20) bps SG&A expense ratio (3) 1.9 % 2.2 % 2.0 % (30) bps 20 bps (1) See Note 22 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Adjusted revenues (1) $ 234,953 $ 202,155 $ 153,499 $ 32,798 16 % $ 48,656 32 % Pre-tax adjusted income from operations (1) $ 7,221 $ 7,001 $ 6,442 $ 220 3 % $ 559 9 % Pre-tax margin (1)(2) 3.1 % 3.5 % 4.2 % (40) bps (70) bps SG&A expense ratio (3) 1.8 % 1.9 % 2.2 % (10) bps (30) bps (1) See Note 23 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
Selected Financial Information For the Years Ended December 31, Change Change (Dollars and adjusted scripts in millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Total adjusted revenues Pharmacy Benefit Services $ 111,822 $ 76,792 $ 75,801 46 % 1 % Specialty and Care Services 90,333 76,707 64,534 18 19 Total adjusted revenues $ 202,155 $ 153,499 $ 140,335 32 % 9 % Pre-tax adjusted income from operations Pharmacy Benefit Services $ 3,577 $ 3,469 $ 3,616 3 % (4) % Specialty and Care Services 3,424 2,973 2,511 15 18 Total pre-tax adjusted income from operations $ 7,001 $ 6,442 $ 6,127 9 % 5 % Pharmacy claim volume (1) 2,120 1,585 1,575 34 % 1 % (1) Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims.
Selected Financial Information For the Years Ended December 31, Change Change (Dollars and adjusted scripts in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Total adjusted revenues Pharmacy Benefit Services $ 132,126 $ 111,822 $ 76,792 18 % 46 % Specialty and Care Services 102,827 90,333 76,707 14 18 Total adjusted revenues $ 234,953 $ 202,155 $ 153,499 16 % 32 % Pre-tax adjusted income from operations Pharmacy Benefit Services $ 3,506 $ 3,577 $ 3,469 (2) % 3 % Specialty and Care Services 3,715 3,424 2,973 8 15 Total pre-tax adjusted income from operations $ 7,221 $ 7,001 $ 6,442 3 % 9 % Pharmacy claim volume (1) 2,222 2,120 1,585 5 % 34 % (1) Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims.
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Adjusted revenues $ 828 $ 596 $ 2,263 $ 232 39 % $ (1,667) (74) % Pre-tax adjusted (loss) income from operations $ (9) $ 96 $ 509 $ (105) N/M % $ (413) (81) % Pre-tax margin (1.1) % 16.1 % 22.5 % (1,720) bps (640) bps 2024 versus 2023 Adjusted revenues primarily reflect premiums and net investment income associated with COLI and our run-off operations and revenues from other non-strategic businesses.
Results of Operations Financial Summary For the Years Ended December 31, Change Change (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Adjusted revenues $ 674 $ 828 $ 596 $ (154) (19) % $ 232 39 % Pre-tax adjusted income (loss) from operations $ 89 $ (9) $ 96 $ 98 N/M % $ (105) N/M % Pre-tax margin 13.2 % (1.1) % 16.1 % 1,430 bps (1,720) bps 2025 versus 2024 Adjusted revenues primarily reflect premiums and net investment income associated with COLI and our run-off operations, as well as revenues from other non-strategic businesses.
Total scheduled payments on long-term debt are $48.5 billion (of which $3.5 billion relate to the fiscal year ending December 31, 2025), which include scheduled interest payments and maturities of long-term debt. See Note 7 to the Consolidated Financial Statements for information regarding principal maturities of long-term debt. 44 Other Non-Current Liabilities.
Total scheduled payments on long-term debt are $49.9 billion through January 2056 (of which $2.0 billion relate to the fiscal year ending December 31, 2026), which include scheduled interest payments and maturities of long-term debt. See Note 7 to the Consolidated Financial Statements for information regarding principal maturities of long-term debt. Other Non-Current Liabilities.
As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment.
As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment.
Financial Summary For the Years Ended December 31, Change Change (In millions) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Pre-tax adjusted loss from operations $ (1,688) $ (1,698) $ (1,466) $ 10 (1) % $ (232) 16 % 2024 versus 2023 Commentary regarding percentage changes represents the driver's impact on the overall category.
Financial Summary For the Years Ended December 31, Change Change (In millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Pre-tax adjusted loss from operations $ (1,593) $ (1,688) $ (1,698) $ 95 (6) % $ 10 (1) % 2025 versus 2024 Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Through these affordability services, we seek to improve the effectiveness of our integrated and fee-for-service solutions, for the benefit of our new and existing clients, by continuously innovating, improving affordability and implementing drug purchasing contract initiatives.
Through these affordability improvements, we seek to improve the effectiveness of our combined and standalone solutions for our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives.
(2) Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues. (3) SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 22 to the Consolidated Financial Statements for further details.
(2) Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues. (3) SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues.
In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.
See Note 23 to the Consolidated Financial Statements for further details. 41 In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.
Healthcare 13,649 13,890 12,619 (241) (2) 1,271 10 International Health (1) 434 426 629 8 2 (203) (32) Administrative services only 14,083 14,316 13,248 (233) (2) 1,068 8 Total 19,147 19,780 18,004 (633) (3) % 1,776 10 % (1) International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.
Healthcare 13,875 13,649 13,890 226 2 % (241) (2) % International Health (1) 435 434 426 1 — 8 2 Administrative services only 14,310 14,083 14,316 227 2 % (233) (2) % Total 18,118 19,147 19,780 (1,029) (5) % (633) (3) % (1) International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.
The SG&A expense ratio decreased 30 bps, primarily reflecting higher adjusted revenues as discussed above. 49 Cigna Healthcare Segment Cigna Healthcare includes the U.S. Healthcare and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers.
The SG&A expense ratio decreased 10 bps, primarily reflecting higher adjusted revenues as discussed above, offset by strategic investments and initiatives to support business growth. Cigna Healthcare Segment Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.
Typically, the most significant input in the measurement of fair value is the market interest rate used to discount the estimated future cash flows of the instrument. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.
Approximately 60% of our debt securities are public securities and approximately 40% are private placement securities. 49 Typically, the most significant input in the measurement of fair value is the market interest rate used to discount the estimated future cash flows of the instrument. Such market rates are derived by calculating the appropriate spreads over comparable U.S.
Balances that are included in the Consolidated Balance Sheets within Investments and Long-term investments, inclusive of amounts held for sale, were $9,423 million and $9,855 million as of December 31, 2024 and December 31, 2023, respectively.
Treasury securities, based on the credit quality, industry and structure of the asset. Balances that are included in the Consolidated Balance Sheets within Investments and Long-term investments were $8,362 million and $9,423 million as of December 31, 2025 and 2024, respectively (inclusive of amounts held for sale as of December 31, 2024).
The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders.
The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by our Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information regarding dividend payments and declarations. Share Repurchases .
Cigna Healthcare Medical Customers As of December 31, Change Change (In thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 U.S. Healthcare 3,853 4,280 3,587 (427) (10) 693 19 International Health (1) 1,211 1,184 1,169 27 2 15 1 Insured 5,064 5,464 4,756 (400) (7) % 708 15 % U.S.
Cigna Healthcare Medical Customers As of December 31, Change Change (In thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 U.S. Healthcare 2,548 3,853 4,280 (1,305) (34) % (427) (10) % International Health (1) 1,260 1,211 1,184 49 4 27 2 Insured 3,808 5,064 5,464 (1,256) (25) % (400) (7) % U.S.
Funds Available Commercial Paper Program . The commercial paper program had approximately $0.9 billion outstanding at December 31, 2024. Revolving Credit Agreements. Our revolving credit agreements provide us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above.
Funds Available Commercial Paper Program . There was no commercial paper outstanding balance as of December 31, 2025. Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above.
If the derived market rates used to calculate fair value increased by 100 basis points, the fair value of the total debt security portfolio of $9.4 billion would decrease by approximately $0.5 billion, resulting in an after-tax decrease to shareholders' equity of approximately $0.4 billion as of December 31, 2024. 47 SEGMENT REPORTING The following section of this MD&A discusses the results of each of our segments.
If the derived market rates used to calculate fair value increased by 100 basis points, the fair value of the total debt security portfolio of $8.4 billion would decrease by approximately $0.4 billion, resulting in an after-tax decrease to shareholders' equity of approximately $0.3 billion as of December 31, 2025.
Note 22 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate. In these segment discussions, we also present "pre-tax margin," calculated as pre-tax adjusted income (loss) from operations divided by adjusted revenues.
Note 23 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate. Ratios presented in the segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.
See "Key Transactions and Business Developments" for further discussion. Key Factors Affecting Segment Performance The key factors that impact Cigna Healthcare revenues and income from operations include revenue growth, customer growth, medical cost trend, percentage of Medicare Advantage customers in plans eligible for quality bonus payments, the medical care ratio ("MCR") and the SG&A expense ratio.
See "Key Transactions and Business Developments" for further discussion. Key Factors Affecting Segment Performance The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below.
The effective tax rate increased, primarily driven by the absence of foreign deferred tax benefits recorded in 2023 and a valuation allowance related to the impairment of VillageMD equity securities, partially offset by the absence of the impact of the valuation allowance resulting from the HCSC transaction recorded in 2023.
The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-1100 bps) and benefits related to the HCSC transaction (-400 bps), partially offset by an increased valuation allowance against foreign tax attributes (+500 bps).
Our continued affordability improvements further reduce drug costs for the benefit of our consumers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations. 48 Key factors that impact Specialty and Care Services: • Customer growth generally results in increased revenues and income from operations.
Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.
As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.
Other Operations Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.
On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy. Primary risks facing many of the issuers in our portfolio include ongoing geopolitical events and economic conditions, including expectations for a longer period of higher inflation and interest rates.
On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy. Primary risks facing many of the issuers in our portfolio include ongoing geopolitical events and economic conditions. To date, most issuers have been successful in managing these issues without a meaningful change in credit quality.
Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits. Parent Level.
Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments; expense requirements, primarily for employee compensation and benefits, information technology, and facilities costs; income taxes; and debt service. 44 Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits.
Healthcare operating segment. 41 Fees and other revenues increased 17%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment. Net investment income decreased 17%, primarily due to a $182 million impairment of dividend receivable in the third quarter of 2024 related to VillageMD accrued dividends.
Fees and other revenues increased 14%, primarily reflecting growth in affordability services (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment. Net investment income increased 8%, primarily due to an increase in partnership income (17%) as well as the absence of the impairment of the dividend receivable in 2024 related to VillageMD accrued dividends (19%).
This includes client movement in our virtual care, in-home care, physical primary care, benefits management and behavioral health services as we expand our businesses and build upon our cross-enterprise leverage.
This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, benefits management and behavioral health services as we expand our businesses.
The factors that could impact our estimates of valuation allowances include changes in forecasted future earnings in foreign jurisdictions, potential international tax reform as a result of Organization for Economic Cooperation and Development initiatives, and the Company's future ability to generate capital gains.
The factors that could impact our estimates of valuation allowances include changes in forecasted future earnings in foreign jurisdictions, potential international tax reform, and the Company's future ability to generate capital gains. Decreases in our valuation allowance would increase net income, while increases in our valuation allowance would decrease net income.
Medical Customers A medical customer is defined as a person meeting any one of the following criteria: • is covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by us; • has access to our provider network for covered services under their medical plan; or • has medical claims that are administered by us.
Medical Customers Medical customers include individuals who meet any of the following criteria: (i) are covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by Cigna Healthcare; (ii) have access to the Cigna Healthcare provider network for covered services under their medical plan; or (iii) have medical claims that are administered by Cigna Healthcare.

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