AM Best Affirms Credit Ratings of The Cigna Group and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of the key U.S. life/health subsidiaries and Europe-based insurance companies of The Cigna Group (Cigna) (headquartered in Bloomfield, CT) [NYSE: CI]. In addition, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the Long-Term Issue Credit Ratings (Long-Term IRs) of Cigna. AM Best also has affirmed the Short-Term Issue Credit Rating (Short-Term IR) of Cigna. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the companies and ratings.) The majority of Cigna’s core U.S. health insurance entities are collectively referred to as Cigna Life & Health Group.

The ratings of Cigna Life & Health Group reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

Cigna Life & Health Group’s balance sheet strength assessment of strong is supported by its risk-adjusted capitalization, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Cigna Life & Health Group’s risk-adjusted capitalization has remained at the strongest level over the past few years, driven by capital expansion supported by favorable earnings, despite sizeable annual dividends. The group also has been strengthened by sources of contingent liquidity, which contributes to the fungibility of capital, with strong and stable metrics, as well as diverse operating cash flows across its businesses. Additional sources of liquidity for the insurance entities include parent company cash and a commercial paper program supported by an unsecured revolving credit facility and access to the debt market, as well as non-regulated cash flows from Cigna's Evernorth business segment. Cigna’s insurance subsidiaries consistently have provided cash flow from operations upstream in the form of sizeable dividends, which have been growing given its ongoing favorable results.

Furthermore, the ratings of Cigna Life & Health Group also consider the high level of goodwill/intangibles at Cigna, the ultimate parent, largely relating to acquisitions. While financial leverage has fluctuated, management remains committed to managing it at approximately 40%. Cigna’s debt service is supported by its strong earnings and dividends from the group’s insurance entities, as well as solid non-regulated earnings from its Evernorth segment. Cigna’s earnings before interest and taxes interest coverage remains good at close to five times for 2023.