CI - Earnings call transcript Q1 2020

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Operator

Good morning. Ladies and gentlemen, thank you for standing by for Cigna's First Quarter 2020 Results Review. At this time, all listeners are in a listen-only mode.

We will conduct a question-and-answer session later during the conference and review procedures on how to enter the queue to ask question at that time. [Operator Instructions] As a reminder, ladies and gentlemen this conference including the Q&A session is being recorded.

turning over by Mr. begin will the to conference We William McDowell. Mr. Please ahead, go McDowell.

William McDowell

morning, for President McDowell, you and of today's Relations. Good thank Will joining everyone call. I’m Investor Vice

Officer; Executive David Chief Eric and are call, cover President results, are our result, such into Cordani, encounter as With for as update In today's locations. Cigna's difficulties. today, David note Chief as begin Cigna's your remarks a and separate dialed including an XXXX. I Officer. financial on me from and any and line Financial would quarter we social distancing technical topics are our Palmer, will that As this XXXX our on a we first I practicing well for call patience appropriate number as financial our we morning would of Eric the ask outlook should

noted earnings As financial known describing as measures total our in financial cigna.com. Generally measures, Earnings as Accounting Share otherwise Principles income, which certain results, GAAP the performance. most net reconciliation from and in is Income earnings the basis United Operations term respectively uses use revenues financial on same accordance adjusted with are principle the Cigna Adjusted We per which and income shareholders and contained States is today's Investor when in to Accepted comparable these Relations of this GAAP. the release posted revenues of section labeled our in measures operations in directly of determined not adjusted our measures, release A from Adjusted

our uncertainties to contained in the differ earnings with in note is and of expectations. outlook future risks risks These release from to and recent Forward-Looking the description making SEC. Statements, statements today, are remarks that including for cause and most reports statements results could uncertainties be today's materially cautionary our to A actual these In our performance. regarding subject will filed current and XXXX some we our

results I items call disclosures. and cover Before turning our a David, over few to the will financial pertaining to

the in $XXX tax results, or netting after our quarter of share. $X.XX charge to per first recorded million we items Regarding special a

in disclosed with of special well transaction supplement, extinguishment the debt, expenses previously as financial other the detailed items related first quarter early associated integration matters. as include and As our costs and in

special in As financial operations our described earnings results. excluded in from today's are adjusted release, discussion from of income items

including the future Please note with that practice so our year year share comments any in disclosed when consistent outlook, will on development medical on XXXX net impact this or make release performance, of gross regarding repurchases, additional both year of excludes prior our we and morning. that basis past Also, prospective do prior we a basis finance full a we costs. development

consistent this Going practice. with basis a will we only gross on forward, measure report industry

full assumes our Additionally, earnings of year business. disability from for XXXX outlook Cigna's life group a and

to the continue our completed divestiture business of of that expect be We third quarter XXXX. to in

turn And the over I David. will with that, to call

David Cordani

of for Thanks I'd begin frontline continue COVID-XX's on acknowledging of and those global this caring crisis. our system for of collogues customers, safety patients we At health the the have we and and lead through patients worked to to in ensure need. will and partner Cigna, to across our by unique today. and everyone. challenge to and like morning, effort the Thanks unprecedented good Will tireless pandemic the joining call the

on quarter our and our dominates we the focus, first While take want COVID-XX an today outlook XXXX. for update you to emergency to time of our understandably much the and results provide with of do the our rightfully balance advantage together of

balance and of our questions. we'll for quarter the first Following expectations results my Eric take more share about will Then comments, XXXX. detail financial your

health COVID-XX stakeholders three attend emergency, crisis. and of by for the response our of this the to respond rapid the to the the to we decisive we've foremost, primary efforts, and Let's first across established needs globe. to taken discussing steps goals beginning begin From

access patients access treatment, medical, care telehealth to medications and have a customers and and the we've behavioral health. For taken steps additional to to for barriers for including remove through and expand dental services they ensure costs for recently testing

in For approach how leveraged those includes and support to challenging advisors consultative dynamic they this as our navigate financial trusted and serving guidance need. environment them providing provided for and and clients, and services we've relief proactively for with This those distress. seeking

provider financial healthcare our as administrative we've given them support. partners, targeted well For as

the the New partnership for crisis. we've with in heroes of of COVID-XX Fund Heart true Additionally, York Life, Brave created the

which mind our fund, reinforces communities. York or Cigna contributions and both Life, work families. together serving other we health so of men $XXX to aims the support the care the peace of and We're to teams accelerated service and an action proud bring assistance are as frontline to monetary taken respective and have our their foundations women This to million on who valiantly provide this to orientation from basis with more New in workers, brave

health protect colleagues Additionally, around steps and taken we've also for XX,XXX the their well-being. appropriate globe, to

the time. are co-workers care pay for continue and ones loved themselves off And site cover allow Cigna emergency essential providing For of dependent. and virus to premium those be providing challenging we're to this for example, additional time XX their to we jobs our absences related during workers days whose to

ensure to second in there now we be and all We're needs crisis today is Our and to future. on of these crisis for of the beyond. our of a continuing value need all and well growth, this in strength We deliver that to ensuring abilities, to innovation talent. time that we our responding franchise invest significant to into maintain the we are on appreciate in many cape our by COVID-XX and stakeholders for and balancing healthy fact is that goal focused know us of positioned and more in them maintain our organization ever, than ongoing depending

is at as partnering as sector well for ensure and to crisis to We've our levels. active profit driving a pandemic. Finally, local we in in of this collaboration role COVID-XX not across are played level of solution part private government, response proactive to response another national key both an high a organizations goal the of

are proud benefit drive will our and response entire to to the our voice we continue work organization for of date, stakeholders. to to While key give of our we

Now, Health tax expectations. turning was digit including briefly in first single billion $X.XX grew to somewhat our billion, after adjusted grew consolidated our ahead business, revenue results to and of to growth high which were earnings our Service strong, results, our quarter $XX.X earnings

Our strategies to and continuing key relationships more to predictable team through by expand business and healthcare simple. execution our of affordable, achieved and and working these results make focused partnerships

will deliver of driven our the attractive that results our line strength quarter and diverse first growth in Service performance again confidence reinforces the line Now, our our Health positioned cash of by underlying portfolio bottom top XXXX, fundamentals including flows. well strong

full $XX recession the are business. customers, for business well to Well, causing, $XX. year Disability is we some in business, including, commercial of Group our it's see as EPS as XX. such, in clearly reaffirming Medical outlook Integrated within our disenrollment as still our both COVID-XX pressure by our impact example, our we driven the developing, Service of as As Health headwinds well

medical from somewhat expect lower recognize a offsetting medical cost, is We fully and procedures. for deferred claims we impacts dynamic this elevated cost As cost COVID-XX from environment.

while for our cash expect drive continue All quarter revenue, us our earnings invest to key year first another However, strong and free the we support flow. of and to to we needs strength the of stakeholders. in

accelerate forward, will healthcare there has in change As system, believe COVID-XX highlighted we industry. that improvement in look doubt which is we the no pandemic opportunities for our

innovative positioned harness combination evolution At that orientation in capabilities disruptive a most evolving work and both Cigna, in we've wave is we and deliver demanding with Scripts exceptional of to to is marketplace. environment clients to of and the customers, for full our capabilities of solutions, to benefit done further health greater an a new this problems. value rapidly differentiated of in have embrace has Express need The levels the solutions new pressing patients a This likely value for the an industry. in broadened differentiate for our partnerships, ourselves the us and to care's even following usher call

behavioral deep data clinical broad our To and achieve and medical, services, pharmacy capabilities. we have insight this, broad and and from strength

have we capitalized and framework. strength health, capital by financial our aided addition, substantial In

As we predictable capital be not tremendous to gives This positions ownership. flexibility intensive delivery positioned for care that we or to affordable, us serve. solutions tied those our us forward and have healthcare assets with investments company, and simple more drive in strategic bricks-and-mortar to make

fueled further partnership is approach by orientation. our Our

January capabilities Cigna individuals and MDLIVE Buoy With simple and more this nurses evolved, of physicians of MDLIVE With And tool, include, MDLIVE in earlier their example, quickly symptoms their we as early checkups. temporarily partner care for to to assess hundreds make launch became access examples offer Health, this partnerships decisions for within now care our recent portfolio US. their Health examples to are available around an two homes. individuals to can the assess about is of all risk the of just comfort technology, Buoy Health, it the first which for which the innovative make and crisis further harnessed of next COVID-XX world. customers intervention to for capacity. for our safety their transferred in With Buoy's Recent MDLIVE broad we care. steps year Buoy virtual COVID-XX to annual and each expand the and informed

with us foundation to COVID-XX Now quickly quarter while to strong health strategic results. summarize, provides effectively first respond the the all to delivered we framework Cigna's and emergency,

customers, colleagues well of and future. All and our XXXX sustained remains to line is and needed, services today the have continuing We both it expanded into support continuing top fuels to bottom partners, growth deliver expectations attractive while and in and healthcare and our XXXX. This in our clients, value communities. ensure whenever company line delivering that however positioned patients, for

embodies more last than of stakeholders and mission of needs Now, commitment the hard their Every globe need the be around our our been as we a none has day, the without improve and over the when us. and stepped peace well-being support those colleagues of several countless around months, health serve. up the key passion they time they've dedication would this This defining to in at to never ways most our the work to globe. of mind and possible clear

that, to call with Eric. the turn Now I'll over

Eric Palmer

Cigna's customers, uniquely the primarily well safety like financially our that these with and of the alignment mission company Cigna's to will of during as quarter review aspects my outlook pandemic. inclusive to remarks David remarks today COVID-XX Thanks for although full our good In and briefly the and discuss my needs everyone. the clients ensuring times on our our results, of as strategy impacts challenging is of our first serving focused our acknowledge the I'll our And be today, focused, response key I'd full year in morning providers, employees.

a $X.X of Now results, our highlights cash $XX.X include $X.XX adjusted earnings underlying customers deliver and adjusted tax, billion, per the of first strong businesses the value of strength clients. of regarding to billion. adjusted we operating quarter flow after consolidated of revenue key few continued share results our earnings quarter reflect and billion and first Cigna's our financial $X.XX

business first of timing which first peace health, portfolio for the intensely and Cigna's of the of Medical all expectations. remains at segments, demonstrate mind somewhat of those of each improving quarter International, United to results impact and our Overall, our and the that diverse the But Integrated also on pandemics quarter of our limited. was onset performed in focused Health the well-being we Within results businesses, ahead progression serve. note States, strength Services, its or given

the an resources affordable, providing acceleration as the And leading times as across by the pandemic. needs. as we of we I'm are as plan we start and look we responding of that balance healthcare ongoing XXXX, simple. navigate our make of with marketplace We're Cigna the many in are that to observing ensure the COVID-XX to recognize ways meeting ecosystem Cigna's well efforts that services we're at predictable unprecedented and proud I'd in Now, and adapting in we partnering those more fully to designs in

earnings XXXX year amounts evident businesses. the in fundamentals, carried to Aided above our momentum $XXX XXXX we by quarter, portfolio strength to we're meaningful deployed, strong previous for of to debt Cigna across first reinvestment I'd and revenues $XXX ongoing context full billion remind our put diverse businesses, you share, that results expectations billion. that underlying expectations year of share adjusted their growth, our adjusted And considerable with for full through through around of reaffirming in consolidated outlook And the in some range repurchase. additional or strong ended capital both and per repayment, returns and and our the shareholders with including

Cigna's quarter, a for the of pace and of exception. resulted COVID-XX saw incidence impact. our recognize challenges the begin globally. virus limited onset We pandemic ramp businesses In and diversification and But businesses to its the we first no the presents all in

Over our Group Commercial headwinds to the balance businesses year, Disability we from Employer across Health in this the our our customers unfavorability Services to business. relative and to include prior our of expectations pandemic expect in performance declines some and

Regarding treatment offset costs with related associated COVID-XX by the medical levels costs, we deferral higher of utilization expect of procedures. lower to

in services it's utilization back Medical in somewhat progression the to earnings through performance expected and clients. second of will aligned US we within our note Integrated such, medical half of expectation The Now, with patterns, XXXX. historical elevated self-funding Cigna's lower quarterly quarter an that vary as the of cost important from is customers arrangements. XX% of And with serve highly Commercial our

an volume deliver Care, and all to growth expect year with Pharmacy highlight continue overall Pharmacy throughout perspective, directly and the year. Advantage, drive businesses, underscore From I'd aligned portfolio our in which strong to continue marketplace continue enterprise needs considerations in Specialty in expense while to Medicare we we of the diversity strength efficiencies. this These Services, solutions that

capabilities We needs. and ability to to to in to to their will and in invest meet continue our the and innovation have serve flex clients customers

from be the and will our Impacts by extent related challenges. and the employment COVID-XX of pandemic financial the to the influenced and economic duration outlook

to pandemic customers, our year health presents. clients, many developments related the We communities that committed the partners care are the and and as will challenges continue through supporting to confront they progress this we monitor environment to

customers well as arrangements, delivery are our our enable and in our To better we and solutions clients with afford care, to the to leveraging access as working system. partnerships customize healthcare

expect of per consolidated a range adjusted $XX in we the continue to $XX.XX. earnings as full whole, Taken year share to

of also of our year that outlook from full development excludes our you year contributions and of remind financial business, the assumes also prior we expense share the offset partially to underlying deployment driven by reserve divestiture Life capital, expected pandemic. would and and our I quarter. additional are fundamentals, these repurchases impact close expect Overall, although by management, future to any Disability that with Group pressures the a and strong continue business of third COVID-XX in results disciplined associated

of efficient amount and with billion liquidity our operations. and flow, position our particularly businesses substantial times which quarter, generate we $X.X cash flows flexibility, stress. to moving first a capital outlook, us capital financial In Now, XXXX of from generated the provides in of cash

the We repurchased also in basis, deployed first $X.X shares debt billion. have a quarter. And billion $X.X stock for we to on of million year-to-date repayment X.X

For of operations, $X.X cash our the XXXX, performing from we than well flow greater efficiency reflecting expect to of billion strong capital businesses. continue

of market. In light a loan $X.X position our cash billion we our liquidity March generate very had to revolving into available the liquidity. to to our as disruptions cash I businesses would in that term of and and good about in billion Looking $X.XX have the for liquidity we committed feel additional further also parent. and XX, overall enhance flows access of to that flexibility, We we billion the entered our an note lines $X.X commercial XXXX, And current credit. in of April, untapped paper

share in billion the expect generating we're Disability and in the XXXX. Finally, in repurchase deploy our close to Group to sale repayment net and $X.X business Life third we which on quarter, of track debt proceeds, to

capitalization remain of Our from of to XXs return of And capitalization our the as XX, December XXXX. on debt XX.X% at track ratio XXXX. end the was upper debt to as March to ratio, of XX.X% XX we down

highly benefiting margins, strategic and a from flow orientation drive based strong service returns efficient flexibility, to Our remain outlook strong, and capital. cash on sheet balance

working the strength providing challenging Now, safety while diversified first we with seeking our to XXXX doing deliver our customers, recap, of partners. communities. focus the We're customers businesses, back with a committed the of performance. against and our intensified ensuring all our Cigna's to differentiated ended for of stakeholders. across services on collaboratively backdrop our carried to for We're our physician of also to the delivering global through sustainable of COVID-XX portfolio and so pandemic, our which We of patients value employees, strong exceptional and clients value continuity to fully benefit quarter

and are The and our which strong well support in business fundamentals environment. partners, us to healthcare durable, clients, and customers, of positions communities challenged dynamic very our this

portfolio environment. And different, somewhat our across full to of EPS us Although adjusted strong of fundamentals these expect enable current we're achieving a objective the mix XXXX we businesses committed to per contributions our remain to reaffirming $XX year various as outlook through XXXX. diverse $XX earnings of for manage is the such, of of and impacts share these in to

the the we'll With over turn the for Q&A operator call. portion that, to it of

Operator

Thank you. [Operator question Rice first A.J. Our Suisse. Instructions] from is with Credit

open, is sir. line Your

A.J. Rice

to Glad everyone's everybody. Hi, safe. hear staying

be the XXXX okay? think we the economic Or some maybe the reiterating assume a outlook gave got you by when there's today months as in to you wanted uncertain even – should outlook? that Just that so that there Clearly, the tougher, your think we reiteration confident just economic six the you're for flesh than cushion assume you're why you're should can in environment a turns much lines, fact had you impacted so through you originally numbers, environment, that little more backdrop it that economic the ask momentum you that was business if out you ago. business What out much will don't XXXX. reiterating reflects your

David Cordani

good are it's Hope voice. and you hear A.J., good morning, your to well. David, family your

target foremost, We it. on have over established track two environment and highly our and first we you XXXX, ago, announced that combination then achieve to doubt that years with current recognize for Scripts remained and put since that the we know disrupted. is context So when Express to we

is believe achievable we Although goal and target. the appropriate an both remains

I use cushion. and the the word momentum correct. You're I would word use wouldn't strength.

marketplace our our our And performing then a look XXXX, of that our environment So oriented effectively when businesses within and diverse we've month through consider strong, stepping through from the in and service to to core to portfolio been integration track we that results mechanisms execute with we solutions in through quite performance and the standpoint. very remains flex first be our carry able able portfolio, quarter dynamic at April. and and funding on diverse

believe target that breadth still would achievable is be and results, I and at global wildcard As we inferred the a and of duration industry look depth clearly that our the your every appropriate note biggest – we for would is the from standpoint, comment, recession. in

that no that business but ball the So high performing business the proper portfolio that's crystal perfectly, us one diverse of our portfolio gives confidence ballast and has target.

A.J. Rice

Okay, thanks.

Operator

Mr. Rice you, question. Thank your for

is Our Gary next Morgan. with from question JP Taylor

sir. Your line open, is

Gary Taylor

A growth very that everybody. I in morning, few because good can you would guess, segment of synergies, XQ core was and I the forward go the pull Healthcare to improvement how we questions, give sense in strong. Hi, us Can EBITDA one from stick the on others? pre-sales there much was Services some versus this some with, XX% of perhaps operations

Eric Palmer

perspectives give a Gary, on it's couple Eric, I'll you of that.

Services the – with quarter. we're So of the first Health pleased business the in overall, really services performance

and on work noted, transition like. and of good David progress a minute again made terms Life the continue ago, in Cigna integration As the to of we've really the

out impact integration in strong forward expectations. to generally, differences that we were At had and the amounts the things or of of up as any of modest That impact last, to referenced relatively and first more as or in million we in synergies continued pulled of later results And so terms come prior of quarter. X.X% terms note there first X%, a point that traction any just additional we – along impact our versus being having we view would that I periods, kind the X of the scripts the volume from was would not ended forward we lines. back results call in program. quarter. You I approximately those that pulled the

Gary Taylor

you. Thank

Operator

for you Mr. question, Thank Taylor. your

from Citi. Our Giacobbe with next Ralph question is

Your line is open, sir.

Ralph Giacobbe

market both and hoping morning, it bring fully of was appetite approach bearing Good smaller ASO like then and holistic you've kind the Medicaid sort positioning or you a Thanks. on the consequences suite expand David, to where historically with player. potential been interest products. see insured, could market Thanks. versus for I of or impact your your And just of long-term you employer and the segments in you thoughts in that risk your terms that just the business of your or COVID individual or of to of lingering not how

David Cordani

Good morning, Ralph.

perspectives employer. the the I step think of the reinforces environment is if importance back, So that the one of we current of an of the power role

we for back, creates in way environment stepping to the but some So vibrant safe employer in healthy, terms business, of employer a engaged creating an role understand have present that the they environment, actually need And employment highly healthy continuity an a have engagement to that productivity for an And the the had safety, need reinforces that productive, of of they dislocation fact pleased of actually see have relative of and co-workers. crisis protocols, just number environment co-worker has forward one employers to to stepped environment engagement. maintaining corporations by even up I where co-worker how benefits. level stepped the that I'm a a and

is see So we that point is quite one important.

we it see choice diverse clients maintain swing. mechanism, don't relates mechanisms regular that broad on funding to one broadly or broad has a to As and project swinging our to think but see a versa. we ASO or costs for to a that, Having have I vice the strength, been important, we offer quite basis continue funding portfolio other swing. ability from a we the be will We said forwarded of so way don't guarantee is this the don't flexibility and that employer

expand, positioned products broad to so both increasingly across strategic standpoint. offering relates our programs it over we've our array time, governmental to is portfolio so of infrastructures expansion. mechanisms expansion, sorts continue funding a delivery critical and services, Health portfolio to corporate that critical, to from segment we see As plans, We're business as to really be Service health of healthcare all cutting Medicaid services through entities on mission and and clients, able up

we individual from we expanded our we've clinical high is up our employer, can like so do of coordination, over finally, final opportunities our in individual dynamically employers care And marketplace the the is past, as comment taking as based systematically core then employees positioning. best if base Health programs. see performance our level Appreciate doing my to are growth the and risk the for chassis the And program today their Services in well business bearing role or see for opportunity of as the And you'll growth clinical and our engagement, of in so. stepping time, an as state big they biases is additional expanded there us, note, we so. program

Ralph Giacobbe

you. Thank

Operator

you question. your Mr. Giacobbe. Thank for

Our Research. Lake Wolfe next is Justin with from question

sir. open, is line Your

Justin Lake

Thanks.

a a – to up. also wanted I and question have Just follow

potential So XXXX, to And you on specifically share just building better, going about to will first question around talk that employer question the repurchase. follow was offset are can blocks my growth? that then up headwinds around A.J's the

would I one, And you first of you you others buying personal expected. would Can get kind about repurchase with purchase stock the it bought about tell a you Thanks. the Can expect bigger have there about Disability of talk well? that – than you given looks to tied bunch the the pause from all? as of first in to And is were out potentially into into potential turn are that is the helpful back proceeds the seeing relative timing about, quarter. that like a to a little talk repurchase the You quarter? of in April? do what then anything sale bit that's third a that Can be me you

David Cordani

packed have you there. in a Justin, lot

blocks the qualitative building walk make Eric question. on XXXX. detailed to me walkthrough do into Day the consider ask and deleveraging, And just building exists 'XX put 'XX to of I'll you provided. at remind us within synergies, audience, as know let detailed it, the that in the more walking we we take I for control of it's versus going when the not we're our the standpoint. it, he for to forth Investor take providing 'XX Eric So first Broadly understand back we XXXX. comment we illustrations a the that terms of ask cross guidance We'll it, from second, to broader but to impact know that few the from get for we you going of impact right. through not it. speaking, blocks that and The understand a second looking would

fundamental program before from get integration and of impact the hand, is into well pieces well in our track in the deployment, foundation and Our of capital we equation that standpoint.

just both business we're our in as One Integrated Health inverting far as finally, well then comments. is far in is Medical business. And two seeing it's thus your thus comment that was disenrollment, and effective the Service what our

just as the related to to marketplace, to which those with more layoffs, through versus are have continuity an us of maintaining gives services those opposed roles expectation finally, employers half that short to to the employers corporate that who effect, service offer had co-worker Integrated And well then reinforces our are continuity, a or the broader portfolio of playing. sale a having being held benefit the Medical fully word furlough level lived as either by employers as For health but much of dislocation, not. benefits, of

stock hand dynamic Eric over we recognize more to qualitative you repurchases. on I give The the dynamics is specifics for it I'd environment. comment of the

And in first done quarter is intensely we unique the event put expand the I'll Eric to it do further that to stock hands from for our COVID-XX was two largely that. of in divestiture, shareholders repurchase capital to strategic the a is a more the responsible spiked epidemic unique unique that But up large this where onetime year. nature before Just is done little the repo. was a ask given That one, secondly, because what in back on having a thing points, which event our United largely is later the have States.

Eric Palmer

overall doing Justin, the David, share the you're that use talked the right. the of dollars as With I framework I've in capital back over about thanks, billion year, respect you And did noted, of well. – a and to think just and we over deploy as course hope of in repurchase, that touched our of terms first quarter. really the for

below we quarter, So XX% don't have the And from as navigating having portion be the navigate ratio that we those deployed business impact the between operations talked that of to proceeds that count the that's the sources reduce group we we the debt share the toward capital the year-end the we've neutral that. through year. as and about both on we we group well would And the as to so for that generate, offset available EPS capitalization and expect from flow in capital of where in which framework year would in cash the the got of quarter. divestiture first deployment effectively flexibility expected for to third in to the of close

Operator

Thank you for your Lake. question. Mr.

with from America. is Bank Fischbeck question next Our Kevin of

Your line sir. open, is

Kevin Fischbeck

Great, thanks.

mix color of businesses typical person recession, within of to impact during customers? can Medicare or kind little about be as how do side of serving not guess your XXX% But in you give kind numbers that Medicaid of talk recession the a a It's that could Services membership any business numbers all to can commercial Thanks. per declines expected that, your if the how we I much guess a perform the the related utilization benefits kind math recession, Health well is as would clear on in for will so business. I of wondering how you on more? Just versus me to overall side the bit health

David Cordani

good integrated Kevin, would clients. speaking, Appreciate traditional morning, question. clients, is integrated think medical two see David. a is picture relative in corporate corporate little larger business serving your to that it's painting typically Broadly disruptive macro Why? of benefits we facing less corporate a it not. Point versus terms about just and

contract. governmental a programs portfolios then through with plans health and of Medicaid from Secondly, diverse services and government Medicare, commercial large other

it that foundational are services services those the nature. in in provides, somewhat Second,

a dramatically that So not the do pharmaceutical utilization individuals as a of change broadly need recession. result speaking

from that along deferrable core foundational of terms It's client the then bit it that not of both with a diversity has more a base it. the aspect exists and in event standpoint, that so comes it the typically balance within

behalf Service to you I for little as we're of a prior As terms had a individuals. for Health clients. to corporate the a Eric of question, have that of second, in reduction more in color in maintaining give broader those XX% seeing benefits well, in noted corporate fully those clients, and Those ask workforce, are space them those on I'll bit that a split actually

terms Eric So mentioned. bit headline, think I of ask I'll measuring the in would splits. you we see versus reasons bit you color it give business of to little traditional it is of just in disrupted a for recession more less a from against terms a the

Eric Palmer

Kevin, answer. Eric. couple Maybe so to of David's add Yeah, things would a it's I here

bit of little a in the some of provide statistics So of distribution scripts all, we different first terms kind such. makeup the of of channels a and across of did

magnitude but XXX Investor a an of In fact, business one we about so associated so of scripts to of of several of sure, of the pretty have book in diversified. be order with the million business, well business last Express though block different within components the Day Scripts, the commercial meaningful that year,

and dynamics covered the consistency of terms and David the in think benefit of the I the such. for of our such volumes patients

durable. of thing will I note order mail we would first impacts the that we is maybe positive experienced quarter think last the that and be Yeah, I think right. the just in

So gaps about time, dispensing mail with carries your order, more get stay in you're Once that accuracy. quite you number mail helps such. keep pharmacy. better prescription from and the of a benefits, right, open with got a or a some likely of care to terms talked And we've obviously home delivery to for on as operation being remaining order in it leading open we've being

our to that help really well. about as to serve feel we customers So ability use good the

Kevin Fischbeck

Okay, thanks.

Operator

Thank for you question your Fischbeck. Mr.

is with George question Hill next Deutsche Our from Bank.

is sir. line Your open,

George Hill

three and the obviously, able by color question. your that benefits. Eric, bring laid you I then And back of thanks health morning, David business? disenrollment laid David, and medical enrollment I months any to in I really type to difference the of versus more year. the to guess, Good the for is balance not trying about, put permanence wondering or hampered off off guess are medical seem setup maintaining the falling have whether care it's same or just trying do the as Yeah. I'm comments and figure looking medical this if taking continuity weeks this the employers of any of thing some the intrigued on dynamic think more expectations. sense the Thanks. the at getting six of to you around is of faster. of the guess permanent costs? to the that PBM out lot. getting I'm I'm of I falling expecting employees costs a falling versus or the I'm keep in are getting know after

David Cordani

of confronting And different Yeah, it's basis. bit a George, I it. whole a on appreciate we're a dynamic variety that

bit. let's unpack maybe a little that So

of First, on the headline cost side equation, no. answer is the

I a costs pharmacy costs is, no, what is there's off. inference medical is medical, in pharmacy similar in your a in fall the costs, of correlated correlation fall furthering not by to experiences mean similar off comment because of your the fall the medical to to in relates So falloff one-for-one off is in deferrable that as that

different and different retaking as have the in there having individual procedure, by a amount separate on may would but impact. the of there script there's that would that end if follow effect Now, deferrable those procedure, on small a a a two large, and been I be back

moment take States, one dislocation tethering, a And pause corporations more ties, to in possible, continuity their care the striving dynamic, to see see hence day XX% but not standpoint, to those in our standpoint, of it's maintaining that currently, business individual such expecting XX that the – there'll all both on disenrollment it that business. benefits be temporary fully an United meaning this back. and the Integrated Medical bring positive with put corporations maintain co-workers full sort as it's ties fully ideally to their want with see what of as is a our their Specific we obviously, are where or re-visitations of employees corporations Health timeline and expectation or from from and important of is really co-workers we of with business expecting Service

back business also – the note You'll employees comes when back. bring

around note incentives stimulus the providing and evaluation Federal the is keeping standpoint. transition employers because beyond that subsidies of regulatory also continuity providing would of the benefit You'll people narrative data employer is place continuity show small at the in part society right the subsidy now the evolution better for by benefit and healthy evolution further to further is large that the first around from

reaching a possible medium governmental that constructively it's incentives point possible, at is to additional to able to helpful? corporations small evolving large, providing level so. time So all both Hope around are where continuity unique think support maintain and posture be of I or where that's and do

George Hill

That is, you. thank

Operator

Thank Hill. your Mr. question you for

is Ma'am, your Our Miss. from Ricky is next line open. with Stanley. Morgan question Goldwasser

Ricky Goldwasser

morning. Good you. Thank

comfortable costs more if and medical of progression about think to numbers about the of timing, about you your surge when in we a regarding the type So second bearish falling think continued severe uncertainty there's but you we that versus scenario more the in unemployment. Do feel scenario the of still a of provided? you XXXX the think that lot XXXX, that under balance point in

David Cordani

close how pinpoint I there's to take Ricky, think point are move it's a but to your uncertainty, time, multiple that would scenarios agree that individual scenario an given I within framing, so both. on appreciate there's then lot we hypothetical's Clearly and in there lever in and appreciate multiple we recognize try a I different exist. constructive your scenarios. framing. don't of In

played as in we have variety XXXX. for running understand is the our a of business for of outlook variety our understanding scenarios well corporation target is as appropriate standpoint. prior control we have that we've environment the for the and leverage of XXXX appropriate And from a and that is sensitivity tests to reaffirmation that control, through the also what I within questions, right our best a as that revenue achievable is now as EPS Our noted within view we our that our

said in notion The both the last second thing the clinical way to more we from is see treatments relative our accelerated and the adjustments see that we've second and to beginning adjusting businesses to I of in operate market is we us. that would or otherwise, elevated to to of for continue further now in protocols, evolution outlook as seeable that, XXXX society outlook a be well, community the having expect a expect believe standpoint is seen would appropriate outlook would which further ideally but for experiences whole to year to this surge a say introduced we half flexible and an protocols,

Operator

Goldwasser. Thank you for Miss. your question

next from Sachs. Our with Jones Goldman question is Robert

open, line sir. Your is

Robert Jones

has other lot or for thanks you managers are with benefit just early selling obviously XXXX. progressed solid curious of up guys just season you retention rate debt out think looks in its this imagine a distractions given, Great, payers Services right the laid pretty just how following I doing now. the are can the questions. segment, guess payers I'm I Health only as dealing on about

then reluctance of Thanks. you the do adding opportunity a And to be there wondering because given wins, less rates that year across to conversely new might fact that's those maybe switching? might higher. dynamics retention board for that just the be So this if in explore net think

David Cordani

David. Good morning, Robert, it's

for retention dimensions, yet So we're view strength let would me the we and a bit then pleased over of again XXXX really really, rate to with be Services Health two XX% expectation But delighted, walk Services, frame that Integrated the and Health in XX% specific strong. Medical. little to for to we're

that the with working wrapping that result strong service delivered as delivery, Now ongoing innovation. our renewals of before And to be strong plan – team health with would a and remind that sustained expect cost largely rate, you sustained retention that's Specific spike around should the in and business, consultative clients. completed largely delivery the first, portfolio those pharmacy complete I COVID-XX. you of could that

or marketplace. the of result evaluate So I passivity would that people to not a to correlate reluctance

on timeline renew the not. more also corporates meaningfully large within that side the of earlier versus portfolio, Secondly, the

to equal world. disruption environment, to all a disruptive to your benefits remaining think a creates a this bridging for more corporation other or hurdle manager their even comment, higher Now I introduce rate, things

tenet place basic to a of because disruption. so solid much I think take that's

affordability, because or able Integrated However, across Services and employers they case this simplification coordinated comment Health the to but all innovative a we of value, still moving equal. value things the predictability that it's for important function see bring comment Service and more them deliver today, offering from Medical step innovative its remain and Health an looking offering still in whether business can even differentiated is being core, at are carries that now

this I going basic right point your tenet forward. from is think

the a terms much of get across. epidemic. before of Service season, to the XX% then I because there's was that bit the a In selling up conclusion so against of wouldn't to Health of just renewal completed the higher hurdle that draw spike XX of

Robert Jones

thanks. it, Got

Operator

your you for Thank question Jones. Mr.

Nephron. with next is Josh Our Raskin question from

open, Your is sir. line

Josh Raskin

here were something call share confirmation COVID bunch around that including Good accounting talks the morning. some favorable outweighing pressures positives, Thanks. of a the guidance Question the from delayed maybe the around services change, International XXXX there benefits, in and the tax and like yet, development, heard about And the cetera. anything I less things impact. that et haven't from benefits buybacks and on

just impact it or is to am maybe I we considering should and missing curious, more and just of membership sort more the guidance I'm be lost seriously. something So appropriate confirm economic

David Cordani

morning, I you frame good it's way Hey, Josh, David. appreciate the the question.

is we're ahead first of to said our that the across appropriate, the International that there within part out that further call the two, And own is non-run latter favorable aided of multiple the believe is there bit portfolios. prudent the in that fundamentals one as Having in outlook the and large was that, you year. most strong in within that a given the exists we quarters, through strong came our and given a strong business. in quarter, expectations case business the could uncertainty expectations Street's year. some really achievable Point item potentially being start point Fundamentals the ratable. the our items both were So of business are

added some as And International example, into top bottom and time, aided So as we line non-run quarter take all the the are half and this item line, potential by it's to strong in to International. puts the given of year. think items we a an it fundamentals, ratable within prudent uncertainty EPS but strong consideration, take second in outlook point at takes and our the that maintain

Josh Raskin

so a specific you point would nothing Okay, to as headwind. major

David Cordani

That Josh. is correct,

Josh Raskin

thanks. Okay,

Operator

Raskin. you Thank Mr. question your for

is Scott Our with from question next Stephens. Fidel

sir. open, line Your is

Scott Fidel

Good to the extended and have on Asia COVID due period a some bit been guys. insights more for key of a Hey, to impacted there. markets Thanks. some of that the business unique into your of the impact exposures to have

they bit those as up seeing So of interested a have. some both just what bit already behaviors, sales to open healthcare and levels of have we for you're longer different consumer relate markets started if Asian into businesses some been than about utilization a in on experiencing you're then later you of that the have COVID track how can products around specifically more sort – and economies of back to some talk as the seeing at recently in of trends these your

David Cordani

two COVID-XX limited we're had just look we're that with workforce from missed not number needs environment. the including highlight able give darn as work question your bit standpoint. work from then to we have the we're cost home co-workers Service in articulate good did rapidly the simple to that into how the creative that base so early David. and to workflows I And keep a to. technology, forward. that, it a Scott, it's where to and home everybody's and I'll on transpiring you you home little own that. then learnings relative the But And It's able but just if that I'll morning, to one ask to of add Point Hey, Wuhan. we co-workers. Great global question, a global of not learning transpire difficult. Health business, dynamic, so I'll I of infrastructure, ongoing bit grab stepping execution a into but to a specific more anything, environment our back carrying an Eric a the in work specific take at flex city little medical pretty meaningful in a starting dynamically connectivity not to some innovation, a is the work environment, of in company, terms learn

retest private partnership. learn imperative the indisputably, Second, public able we're and to around

testing from to in, operate we cetera. see, support, community treatment, cetera, public being country protocols, worksite et access, to this et being et to cetera, is to management, private to the partnership testing safety, to able every you workers to integral In respond

to we'd country for be position So we proactively States helped reach and believe expect saw engage. in us to after that in country United country, out to the able which that that be after like that in

globally relates that it more the globe. through we global our of cost but the It's thin As employer to covering a see mobile medical the dynamic, population. businesses large business, it's across

standpoint, pretty back the Eric, add? to social coming including activation individual consumer, it to see you rapidly, we broadly sale my the that, small see And as of that interaction bytes opposed really speaking the rapidly a process, process. So in from a anything everywhere, as to the of standpoint. earliest be, final would from to the onset of behavior consumer the services and sale that snippets had relates even that to markets consuming density your comment quite

Eric Palmer

effectively David, at there, nothing I think to you point. hit else pretty headlines so the add this

David Cordani

Thanks, Scott.

Scott Fidel

thanks. Yeah,

Operator

your Mr. Thank you for question Fidel.

Valiquette is from Barclays. Steven question Our with next

is line open, sir. Your

Steve Valiquette

thanks. Great, question. and thanks and morning, taking Good for David Eric, the

on lower now your word elevated, to expecting historical the some and in in you be your for utilization your as lower the utilization healthcare in any you elevated back a half budgeting half XXXX. up managed would remarks to that investors mixed some using expectation are similar the back of healthcare above this half quarter, second prepared utilization of in I views just By catch at versus mentioned the from of magnitude XQ point XXXX. trends care think back healthcare of the trends still deferred to clarify, among Thanks. I back many care, there's back So in peers, returning just elevated basically bounce of just COVID-XX? overall and normal the year or of before there's then then averages guess, of

Eric Palmer

is to bit recognize it's Eric. step start unprecedented, I'll right. Steve, this Yeah, I think Overall, a here.

into been geographies. looking a it's dynamics this, I of stepping pretty are, we've So different at one, set across the think here different things

across note, out would think and how think different there'll I just this understanding different geographies. path I So I and the geographies be plays approach there. across variations

impactful As the COVID impact, some others. certainly been than more in geographies

to I think with things will start out noted I that I come the in second remarks think be some there some of in would more that others, Two, half will prepared that of year. we in into are geographies back the lead the that to view as will quarter, so one. that deferred than disruption my

those fourth it's and that the the but to Now, some third second I think mean, don't least in from deferred all are occurring one the quarters, for I one. think it'll necessarily in be terms you'd of add don't we of it. appropriate of of things were quarter working the this, back at coming And think what PTO progress we to to else as I as about posted continue through our year. estimates know and David, in back half of be we'll there. refine the

David Cordani

XX% Yeah, of to with our you, sure. business for commercial ASO. our Steven, specifically I remind I agree is remember would your ask business, you for I comments

utilization standpoint. back from think either capacity the doing of what MA a don't employer MA level in customers some prior it are to of a And delivery in in redeploying value system fulfillment versus when from based seeing procedures triage that care our final today, to the Different a a systems that capacity, right you I healthcare forward are experiencing and healthcare the that standpoint. dimensions service from but deferrable are carry about coded virtual that approximately now. get taxed or massive XX% short clients our aligned our period our relationship right, we not are time, thought facilities need recognize surgeons need and we're taxed, doing to we over standpoint. are in of way, procedures And with that that who and So the with otherwise to uptick portfolio, even then to that fact is of mean a healthcare its is system

the that for important uncertainty our a half So half the experience scenarios reversion with in operating here, of year aggregate we're we're benefits right cost in and based they'll the but Eric aligned employer as clients, more second noted see a the of upon lot and the now. with of of us year first the bit

Steve Valiquette

that, elective. I provided mean, medical what Just a on peers percent non-emergent very quick spend follow your have or of ranges as either of on some up they total deem

discussed able based also declining on either your or right how metrics percent what elective on is that and to share late on have now? these Some basis, in March much in seeing care April. Are you a trends you're views

Eric Palmer

some weeks – April. the see care for in or first XX% some its most the as cost you reduction deferrals of Scott, effective in markets, our as could much few Eric, of of

Steve Valiquette

perfect. that's Okay,

Thank Okay. you.

Operator

Mrs. question Valiquette. your for you Thank

with Windley Our next from comes question David Jefferies.

open, Your line is sir.

David Windley

questions and my taking for you good thank Hi, morning.

you that You've If reason certainly. is true of what reason or that are in commented here is for a to extent at the membership recession middle in the would I'm there end membership you. about first that one feeling another if the the being is COVID looking quarter. at slow wondering in if impacting that variables Thank – already and of of the and what kind growth that selecting a certainly be? first – are that slash you market relatively

Eric Palmer

I little terms we of overall, reported Okay. overall. point in to then the again, really add a note current customer And a he a as just David else first back ask I'll anything COVID quarter Select the from continued segment. if bit, we perspective wants pleased the pandemic broadly, stepping growth David, and the we're membership here. And to with results, in wouldn't start it's driver Eric. Hey, on

XX% lot in where different We've it right. on about of year So is ago. versus continuously that about terms basis up a were throughout a year, a a now business talked grows of in year-on-year we the settings. This

in I consistent get good So year-on-year up out performance we've on a you're there, in a well momentum quarter pretty mean, you're it's mid quarter as there. growth got so to market, bit pretty again, basis consistent

wouldn't dynamic at about first to scale. any again disruption in So as what the as any quarter I we broad think David, we the pandemic point else actual would?

David Cordani

throughout the course the the the lost segment add complicated the Yeah, sometimes only ramps resonating which of see the space value year. we And offering quite think Select proposition I'd the point – I is just well. is we reaffirm have thing maybe is can is in and that

David Windley

you. Thank

Operator

Windley. you Mr. your Thank question for

Rhyee Our will Cowen. last with your line Charles question Rhyee, come is from open. Mr.

Charles Rhyee

health. a there questions sort formulary, it, care is maybe digital uptick taking kind the distinction the social then what Thanks. pandemic? the And come diabetes you're of in at guys when distancing on would the doing that has I of in you've efforts question. I using for to kind I about into been been formulary practices launch employers you for this et make this most be of also maybe the were kind the one the at the the has and response looked related in Thanks with to you of – David, And formulary it first the to been the talk coming constructing you and thanks. a of really that cetera. you're Telehealth really nation virtual interest my particularly to guess, mental helpful. care about guess, answered. middle in wasn't able Can you for as and provide any of Yeah, clients year? it's last obviously virtual guess, when have of about of look forefront obviously, the – and talked and some of I itself here beginning, the particularly that thought care MDLIVE to what

David Cordani

Charles. Good morning.

your Let kind question to of try here. compartmentalize me

of I services cetera. So and think bit telehealth et a you're then little off an referenced the the digital building formulary you

more is digital customers formulary our well clients, of seek the offerings of say, corporate So and in we're many as an should health back, trying that I help to informed our seek making to customers where plans was one innovative decisions. to example an meaning they terms of maybe offering, stepping as utilize innovative as

that plus and specific a has to try growing there formulary purpose digital to them evaluate are the out So against and take digital the and XXX,XXX applications criteria. to specific curate

inferred agree has broadly More simplified, services, I with aggressively personalized, appetite convenient in your statement, care. been information ways which of ramping increasingly is and more society accessing at large for

a proprietary intervention. as that larger portion of like our of were we to ago as and that the be And as as a us it part that. And is both we or around wasn't capabilities. the We cetera, slice big market see with as future. be positioning partnering to having checkups. offering. et well would to brought So We noted, the coordinated that I offer first telehealth both we overall today annual an a capability, think a dental as long a using COVID-XX telehealth could society of integrated epidemic triage small I healthcare And reinforcing

customer bring and And capability of and to very the actionable, around we're from Buoy with going decisions virtual both able an with patient or that example then partnership, make way just which harnessing but and Health rapidly forward wrapping the oneself standpoint. is center market to assess the putting lastly, another tool providing that front to it, through informed

conflict both in harness end access what front carrying the and we care, well information way is a as and re-envisioning having as a the virtualization, tools fulfillment quite part we will picture we or positioning with care and call see appetite tethered is to bricks-and-mortar high that And forward. is delivery that. that think the our that experiencing grow who will are satisfaction resources And to whether not the by going in of start care which of big to capabilities, be new right or level through the beholden high. system. So system with care being like which of consumers And it's tremendous now opportunity the as a coordinated individuals from technologies, that we

Charles Rhyee

to on Buoy sense David, ones I partner like your with relatively that you decision of can you like which now that until these quickly low. in maybe utilization as MDLIVE my been versus if a could telehealth Health follow us mind has tree been own capabilities want in I particularly of you guess the sort to such assumption give and want fairly up, has

is So decision house? is say point partner have it, there say doing capability we easier to rather you this a and in is look when but telehealth would a the at somebody want to even we'd with Thanks.

David Cordani

say today Group fulfilling stay video it. today we of the so in either less XX% tuned is experiences interaction Cigna our can little today firsthand. is platform, so question, Arizona fulfillment framing a on do We fair than So I'd own all that bit telehealth more, relative to Medical approximately some you give telephony taking our to through their out for place but through the COVID see interaction of environment, and during patient XX% or of physical

expect more partners advanced data successfully certain to management, co-developed algorithms, Bigger oriented said at healthcare around have data, be IP see some markets, the then to bring to telehealth very open personalization, helps? Property, we're partnered we to us more ways a the in be quality, capability marketplace with choice. based and the going clinical then to with minimum, value the the Secondly, we've partner architected Hope to to oriented picture, our the respective able in different having around capability to deliver that, that predictive some own offer and the it of on data the scale. some be Intellectual or that the

Operator

so Rhyee. closing your for the now back remarks. Cordani I'll Mr. much question you for to David over Thank turn conference

David Cordani

that a significant local levels. selfless acknowledging our organization thanks future of healthy again for and into all continue their caring maintain in both value to Cigna's this lead start will perspective, positioned of as of that and is we as of crisis, today. the to and you. tireless that partnering as the stakeholders solution, through work COVID-XX workers globe, our the to needs everyone they're attend proactive both patients efforts part to crisis call for nature be across today we Thank work stakeholders well From the of for the frontline to by servicing. the ensure a we want to to And the deliver I well all our joining national the

in strong expand through and our results members you strategies joining forward We and healthcare working top of future your quarter, predictable look to team sustained, we in and simple. XXXX. delivering continuing attractive and growth performance, our for key the our by Relative and growth our challenging business you during wish call. and to XXXX we that, health thank for our continuing affordable, these first make to line achieved and relationships fuels family discussions. This in partnerships more and line the to you and both focused bottom this With safety of execution times expectations

Operator

A gentlemen, this be XXXX Cigna's concludes Ladies this available business recording will available call. review. for be respond will shortly. investor quarter questions and first of additional this relations to results following Cigna to days conference XX

You required. for Thank you by XXX-XXX-XXXX. may No participating. conference passcode dialing the is recorded access

disconnect. now will We

Cigna (CI) 30 Apr 202020 Q1 Earnings call transcript