Cigna's Story: A Crisis, a Rebate-Free Pivot, and a 17-Year CEO Handoff

The story

Late 2023: peak confidence

On the February 2024 call, CEO David Cordani declared "2023 was a very strong year," having raised guidance twice during the year and still beaten it. Express Scripts had just launched the industry's largest-ever PBM contract (Centene, over 400 million prescriptions annually), and the company set an aggressive 2024 EPS target of "at least $28.25." Around the same time, Cigna had just agreed to sell its Medicare Advantage business to HCSC, and management emphasized a decade-plus track record of "10-13% long-term EPS growth."

Late 2024: two crises hit almost simultaneously

On the Q3 FY2024 call (October 2024), Cordani unusually addressed "recent rumors and reports about our company" directly, citing outside economist research to rebut an FTC report critical of PBMs. That September, the FTC had indeed filed an administrative complaint against Express Scripts and other PBMs over insulin rebate practices. Two months later, in December 2024, a UnitedHealth Group executive was killed, and the entire industry faced a wave of public scrutiny. Around the same time, Cigna's own large-employer stop-loss (high-cost claims) costs ran well above expectations, pushing Q4 medical care ratio to 87.9%. On the January 2025 call, the company admitted for the first time that results fell "short of our expectations" — the $28.25 EPS target promised a year earlier came in at $27.33, a miss.

The response: changing how it talks, and how it does business

Before the crisis (the FY2023 and FY2024 10-Ks), the risk-factors chapter opened with a generic "Strategic and Operational Risks" category. The FY2025 10-K (filed February 2026) introduced, for the first time, a new opening category — "Risks Related to Our Business as a Health Company" — with its very first risk being the need to "predict, price for and manage health care costs appropriately." At the same time, starting with the January 2025 call, the company disclosed it was developing a new rebate-free pharmacy-benefit model, "Signature," formally announced in October 2025 — timed almost exactly with a February 2026 settlement of the FTC lawsuit that required no fine but did require "changes to business practices."

Now: EPS recovered, but the core cost metric hasn't

FY2025 results (EPS $29.84) beat guidance ($29.50) again, but the core cost metric, MCR, came in at 84.4% — slightly above even the high end of its own guidance range (84.2%), the second straight year of missing that specific target even as EPS recovered. Against this backdrop, Cordani announced in March 2026 that after "17 years as CEO," he would hand the role to 30-year company veteran Brian Evanko, calling it "a carefully planned succession." In his first solo earnings call in July 2026, Evanko never mentioned Cordani by name, leaned heavily on AI and personalization technology investments, and raised guidance for two straight quarters ($30.25 → $30.35 → $30.45).

Guidance scorecard

EPS returned to a "promise, then beat" pattern after the 2024 miss — but the core cost metric (MCR) missed its guided range in both 2024 and 2025. That split suggests the EPS recovery may partly reflect other levers (buybacks, investment income) rather than a full recovery in the credibility of the company's underlying medical-cost management.

Source: Q4 FY2023, Q4 FY2024, Q4 FY2025, Q1 FY2026, and Q2 FY2026 earnings call transcripts; 10-K FY2025 MD&A (confirmed MCR figures).

Timeline

• Feb 2024Q4 2023 call: "2023 was a very strong year"; aggressive 2024 EPS target set; Centene PBM contract launched.
• Sep 2024FTC files an administrative complaint against Express Scripts and other PBMs over insulin rebate practices.
• Oct 2024Q3 2024 call: Cordani directly addresses "rumors and reports"; a defensive tone appears for the first time.
• Dec 2024A UnitedHealth executive is killed, triggering an industry-wide public trust crisis; Cigna's Q4 stop-loss costs push MCR to 87.9%.
• Jan 2025Q4 2024 call: the company admits results fell "short of expectations" for the first time; FY2024 EPS miss confirmed ($27.33 vs. $28.25 target).
• Oct 2025"Signature," the rebate-free PBM model, is formally announced.
• Feb 2026FTC lawsuit settled (no fine, business-practice changes required); the FY2025 10-K adds a new "Health Company" risk category.
• Mar 2026Cordani announces he'll step down after 17 years as CEO; Brian Evanko named successor.
• Jul 2026Q2 2026 call: Evanko's first solo call; guidance raised again; AI and personalization investment emphasized.

Our read

Cigna's last three years trace a genuine crisis followed by a structural response: a regulatory complaint and a cost-management failure arrived within months of each other, forcing an admitted guidance miss and, eventually, a redesign of the core PBM rebate model that generates the bulk of company revenue. The EPS recovery that followed is real, but it leans on levers other than the underlying cost discipline the market cares most about — MCR missed its own guided range for a second straight year even as EPS beat. The new CEO inherits a business that looks steadier on the surface than it did in early 2025, but the core question — whether Signature actually fixes the cost and regulatory pressure, or just repackages it — won't be answerable until it's fully live in 2027-2028.

What we still don't know

• How the 2027 rollout of the Signature (rebate-free) model to Cigna Healthcare's fully-insured customers will affect margins isn't disclosed yet — the 2027 earnings calls would need to be checked.
• What exactly the "rumors and reports" referenced on the October 2024 call were isn't specified by the company anywhere in the materials reviewed.
• Whether new CEO Brian Evanko will maintain the long-standing 10-14% long-term EPS growth target, or revise it hasn't been explicitly reconfirmed yet.