The Cigna Group · NYSE:CI
The Cigna — Cigna — Investor Day (May 2019)
111 slides from The Cigna's investor day presentation, May 31, 2019
Slide 1: Cigna Investor Day, May 31, 2019
May 31, 2019 © 2019 Cigna
Slide 2: Welcome
WELCOME Will McDowell VP, Investor Relations
Slide 3: Forward-looking statements and Non-GAAP measures
Forward-looking statements and Non-GAAP measures CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation, and oral statements made with respect to information contained in this presentation, may contain forward-looking statements within the meaning of the Private Securities Litigation
Slide 4: Forward-looking statements and Non-GAAP measures (continued)
economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K and subsequent reports on Forms 10-Q and 8-K available on the Investor Rel
Slide 5: Non-GAAP measures and note regarding outlook
The appendix slide titled “Definitions of Key Financial and Business Terms” includes definitions of other financial or business metrics referenced in this presentation, including medical cost trend, adjusted pharmacy scripts, market segments, customer relationships, medical care ratio, SG&A expense
Slide 6: Agenda
8:30 am–9:00 am Strategic Overview and Positioning for Growth Session 1: Investor Breakout Sessions with Management David Cordani, President and Chief Executive Officer 11:00 am–11:25 am (guests will select two to attend) 9:00 am–9:40 am Cigna Health Services – Market Strategies and Session 2: • Dig
Slide 7: Strategic Overview and Positioning for Growth
STRATEGIC OVERVIEW AND POSITIONING FOR GROWTH David Cordani President and Chief Executive Officer
Slide 8: Agenda
Agenda Value creation framework Delivering results in a changing environment Our growth path forward © 2019 Cigna
Slide 9: A global health service company
A global health service company Improve Transform affordability health care Develop new innovations Grow across four platforms Outstanding cash flow generation © 2019 Cigna
Slide 10: Creating a more sustainable system
Creating a more sustainable system PHASE 1 TRANSACTIONAL PHASE 2 TRANSITIONAL PHASE 3 TRANSFORMATIVE © 2019 Cigna
Slide 11: Transformative phase: Addressing whole person health
Transformative phase: Addressing whole person health more than 1,000 650+ health coaches 0.4% commercial Collaborative Accountable Care and specialists arrangements pharmacy trend Behavioral or Pharmaceutical Medical lifestyle changes interventions interventions © 2019 Cigna
Slide 12: Transformative phase: Delivering connected care
Transformative phase: Delivering connected care Data, actionable insights and AI Coaches, clinicians and experts © 2019 Cigna
Slide 13: Transformative phase: Driving continuous innovation
Transformative phase: Driving continuous innovation Clients Customers and patients Physician partners Innovative alignment programs Patient Assurance Program HealthConnect 360 © 2019 Cigna
Slide 14: Our path forward
Our path forward CHANGING ENVIRONMENT GROWTH EXECUTION © 2019 Cigna
Slide 15: Proven ability to thrive
Proven ability to thrive Relentless focus on addressing Shaping regulatory Strategic and needs of our customers, landscape financial flexibility patients and clients © 2019 Cigna
Slide 16: Our growth platforms
Our growth platforms HEALTH SERVICES COMMERCIAL GOVERNMENT INTERNATIONAL • Increase pharmacy • Select and Middle • New markets • Expansion in services for Cigna Market expansion • PPO product existing geos clients and integration expansion • Innovating new • Offer Cigna services • Go deeper • Accele
Slide 17: First-half 2019 successes
First-half 2019 successes 1 Strong Q1 results 2 Delivering on strategic integration priorities 3 Accelerating growth opportunities © 2019 Cigna
Slide 18: Strong confidence in our future
Strong confidence in our future PROVEN CLEAR TALENT FOUR OUTSTANDING TRACK STRATEGIC AND GROWTH FINANCIAL RECORD DIRECTION CULTURE PLATFORMS FLEXIBILITY © 2019 Cigna
Slide 19: Health Services: Market Strategy and Growth Priorities
HEALTH SERVICES MARKET STRATEGY AND GROWTH PRIORITIES Tim Wentworth President, Express Scripts and Cigna Services © 2019 Cigna
Slide 20: Customer needs drive our focus
Customer needs drive our focus Customers, patients, clients and health care partners are challenged by a fragmented, complicated and costly health care system © 2019 Cigna
Slide 21: Our growth is driven by our ability to help businesses win
Our growth is driven by our ability to help businesses win • Our business is strong We build deeper relationships and growing We deliver greater innovation from • Our opportunities are Cigna and Express Scripts meaningfully enhanced We leverage Accredo, the with Cigna industry’s most sophisticated s
Slide 22: Building net new value creation and value capture opportunities
Building net new value creation and value capture opportunities © 2019 Cigna
Slide 23: Expanding a model that wins with all client types
Expanding a model that wins with all client types Business mix, by projected 2019 adjusted pharmacy script volume (millions) Canada and Other 149 Select/Small 5 Middle Market Medicare 2,500+ Employers 75 & Medicaid National clients 418 Accounts 183 338 75M+ customers Health plans 205 Employer mix Fe
Slide 24: Our outstanding results drive retention and growth
Our outstanding results drive retention and growth We deliver Clients stay BETTER TRENDS 0.4% Record low drug trend -0.3% NEGATIVE trend for for commercial clients Medicare clients 98.5% Overall client retention for 2019, and nearly BETTER EXPERIENCE 77 Accredo advanced #1 100% of health plans Satis
Slide 25: Our solutions drive retention and growth
Our solutions drive retention and growth 96-98% Projected 2020 retention 25M to 35M Projected 2020 organic growth in adjusted pharmacy scripts Clients and prospects see us as their pharmacy innovation partner for the long-term Cigna outlook as of May 31, 2019 © 2019 Cigna
Slide 26: Innovating for better health and financial outcomes
Innovating for better health and financial outcomes Patient Assurance Flex Formulary Digital Health Health Connect 360 Program Formulary © 2019 Cigna
Slide 27: As the marketplace evolves, so does our growth strategy
As the marketplace evolves, so does our growth strategy PBM tool Generics Diversified Driving Personalized development and scale solutions value 1990s 2000s 2010s Today care Tomorrow • Whole person health solutions • Specialized and tailored care • Performance-based agreements TRANSACTIONAL TRANSITI
Slide 28: A clear path to sustainable, long-term growth
A clear path to sustainable, long-term growth Leveraging a complementary footprint to deepen existing relationships, add new relationships, and expand use of our innovative solutions Creating and capturing new value through our combination Leading in the rapidly expanding practice of specialty pharm
Slide 29: Creating and capturing value with market-leading services
Creating and capturing value with market-leading services Specialty Supply Chain Direct to Medical/Clinical Pharmacy Care Solutions Management Consumer Management We are leaders in pharmacy care, specialty pharmacy, data services and clinical, medical and supply chain management © 2019 Cigna
Slide 30: Building on our core strengths with significant room to run
Building on our core strengths with significant room to run in the future Solution penetration rates Future Low Low-Mid Mid-High High Opportunities • Clinical • Medical benefit • Utilization • Supply chain performance management management management • Behavioral health guarantees • Home delivery •
Slide 31: Taking share in geographic expansion opportunities
Taking share in geographic expansion opportunities > 25 % 11 – 25 % 6 – 10 % 3–5% 0–2% Express Scripts market share for pharmacy benefits management services. Cigna market share for commercial managed care plans. Delivering market-leading results to help businesses win, deepening existing relationsh
Slide 32: Taking share in geographic expansion opportunities
Taking share in geographic expansion opportunities Highlighted geographies represent significant growth opportunities, leveraging strong existing Cigna or Express Scripts footprints. Delivering market-leading results to help businesses win, deepening existing relationships, and building new ones acr
Slide 33: Delivering comprehensive, cost-effective, convenient care
Delivering comprehensive, cost-effective, convenient care • Medical Benefit Management expansion • Post-acute care opportunities • Holistic oncology solutions • World class specialty pharmacy expertise More comprehensive, personalized, coordinated services Better clinical and cost outcomes © 2019 Ci
Slide 34: Accredo is well positioned to drive market-leading growth
Accredo is well positioned to drive market-leading growth Clinical excellence Local and community Taking action to realize the full to improve health outcomes support to drive engagement value of innovative medicines Industry-leading specialization in Nurse educators help caregivers Industry’s broad
Slide 35: We will accelerate the next generic wave, in specialty
We will accelerate the next generic wave, in specialty Specialty generics Biosimilars $14B RECENT APPROVALS $24B OPPORTUNITY $7 $5 $5 $5 Biosimilars could $4 $3 $3 $3 $3 reduce direct spending on biologic drugs by $54 billion in the next decade U.S. Drug spend estimates are based on IQVIA data for 2
Slide 36: Rare and orphan drugs represent significant opportunity for Accredo
Rare and orphan drugs represent One-third of new significant opportunity for Accredo FDA-approved drugs are for an orphan 2014 46 designation 2015 51 $140K 2016 54 is the average cost of an orphan drug per patient, 2017 58 per year 2018 61 54% increase in costs for rare- 2019 64 condition medication
Slide 37: Putting rebates into perspective
Putting rebates into perspective Rebates apply to Of all discount dollars, 7% of our pharmacy scripts 95% pass through to clients Clients choose between rebate offsets and direct payment for other services © 2019 Cigna
Slide 38: As the market evolves, so does the way we capture value
As the market evolves, so does the way we capture value Innovative Flexible Consistent solutions contracting profitability • We deliver aligned, • We enable clients • We create and innovative to choose funding capture value solutions tailored methods and in dynamic to client needs formularies enviro
Slide 39: We deliver long-term sustainable growth
We deliver long-term sustainable growth Our wide array of We serve a diverse Our combination services align with set of clients, with enhances our value current and emerging opportunity to deepen proposition and market needs of payers, relationships across leadership in driving patients and provider
Slide 40: We deliver long-term sustainable growth
We deliver long-term sustainable growth ALIGNED Providing transparency and choice WITH CLIENTS Delivering exceptional value WE GROW Strong retention and script growth GROWTH • Increasing penetration across markets we serve TARGETS • 3% to 5% revenue growth Significant future opportunities • 3% to 5%
Slide 41: Delivering Greater Affordability in Health Care
DELIVERING GREATER AFFORDABILITY IN HEALTH CARE Matt Manders, President, Strategy & Solutions Dr. Steve Miller, Chief Clinical Officer © 2019 Cigna
Slide 42: This is a pivotal moment for our industry
This is a pivotal moment for our industry Access Affordability Value Transparency © 2019 Cigna
Slide 43: Tackling the affordability challenge – the evolving approach
Tackling the affordability challenge – the evolving approach PHASE 1 • Traditional benefit design TRANSACTIONAL • Focus on access and unit cost PHASE 2 • Consumer-directed plans introduced • Incentive alignment with customers & providers TRANSITIONAL • Deeper partnerships & new relationship models P
Slide 44: Tackling the affordability challenge – unmanaged to Cigna managed
Tackling the affordability challenge – unmanaged to Cigna managed ≥ 8% Cigna Managed cost drivers 6% Collaborative care arrangements Medical cost trend (%) Network 4% configuration Site of service initiatives Condition-specific solutions and clinical programs Unmanaged Managed Cigna Managed Approach
Slide 45: Cigna's formula for driving affordability
Cigna’s formula for driving affordability through the transitional phase Data and advanced Consultative client insights driven solutions approach AFFORDABILITY Choice-based delivery Deep customer system strategy engagement © 2019 Cigna
Slide 46: Cigna's delivery system strategy
Cigna’s delivery system strategy Ensuring access to the right care, in the preferred and appropriate place, at the right time • Traditional inpatient or • Treat individually rather than outpatient settings in aggregate • In home • Leverage data and analytics • At work/onsite clinics to guide and sup
Slide 47: Transformative phase
Transformative phase Enable Re-envision New business existing business existing business models Proprietary predictive models Customer-driven innovation Disruptive companies partner with deliver personalized care and deepens relationships and earns us to leverage our size, scale and guaranteed outco
Slide 48: Transformative value creation examples
Transformative value creation examples Leverage emerging Expand relationships Enhance care program technologies and with physician design for whole digital tools collaboratives person health © 2019 Cigna
Slide 49: Transformative value creation through Accredo
Transformative value creation through Accredo Long Term Mid Term Near Term Improved Enhanced Accelerated access to oncology value-based limited condition arrangements distribution management with specialist drugs providers © 2019 Cigna
Slide 50: Transformative phase – getting to CPI
Transformative phase – getting to CPI ≥ 8% CPI aligned cost drivers Improved pharmacy economics 6% Condition-specific solutions and Medical cost trend (%) clinical programs 4% Collaborative care arrangements Technological advancements CPI-level expand customer engagement Deepened client engagement i
Slide 51: Leading into the transformative phase to deliver sustainable affordability
Four growth platforms 1 Health Services Leading into the transformative phase 2 Commercial to deliver sustainable affordability 3 Government International 4 Markets © 2019 Cigna
Slide 52: U.S. Commercial: Market Strategy and Growth Priorities
U.S. COMMERCIAL MARKET STRATEGY AND GROWTH PRIORITIES Mike Triplett President, U.S. Commercial © 2019 Cigna
Slide 53: How we are different
How we are different We approach each client individually Value proposition Highly consultative sales whole person health and account teams Partnership with providers aligned on value-based care Powered by technology, solutions, and talent © 2019 Cigna
Slide 54: Value creation
Value creation Commercial Organic growth for membership growth Solution depth nine years in a row 15M 14.0 14M 13.6 Strong Pharmacy Behavioral 13.0 client retention 13M 12.8 Segment penetration penetration 12.4 12.1 National <40% ~90% 12M 11.3 12.2 Solution depth Middle* >70% >95% 11M 11.3 and coord
Slide 55: Consultative sales approach
Consultative sales approach Affordability, choice, predictability, ease Network Benefit categories Medical management Pharmacy Ideal solution suite Behavioral Specialty Rx for each client Flexible Platforms Funding options Innovate and Chronic conditions evolve over time Health risks Wellness Incent
Slide 56: Breadth of coordinated capabilities
Breadth of coordinated capabilities Driving differentiated outcomes Over 40 ~4% solutions medical cost Behavioral savings Pharmacy Specialty pharmacy $380 PEPY Lifestyle management savings Personal Health Team 9% Biometric screenings …and more reduction in high cost medical claims PEPY is per employ
Slide 57: Structural Group Inc.: Improving health, lowering costs
Structural Group Inc.: Improving health, lowering costs Annual Savings Total Savings: $5.1M in (PMPY savings costs avoided $1.6M $1.0M $0.8M $1.7M x customers) $5.1M $6,000 $5,501 Average competitor $5,189 reported trend 6% $4,896 PMPY $4,618 PMPY spend with $4,357 $4,803 $4,757 Cigna $4,357 $4,427
Slide 58: Market opportunity
Market opportunity U.S. Commercial Employer Market Opportunity National Accounts 33M Middle Market Middle Market and Cigna: Select segments 8.1M medical customers – Middle Market 15% market share account for 53M ~ 65% Select Select 40M of the U.S. Commercial Cigna: 2.2M medical customers – employer
Slide 59: Expanding our “Go Deep” markets
Expanding our “Go Deep” markets Capture headroom in existing markets Go deeper in +25% Enhanced new markets specialty capabilities and innovation + Express Scripts > 25 % 11 – 25 % 6 – 10 % 3–5% Cigna market share for commercial managed care plans. 0–2% © 2019 Cigna
Slide 60: U.S. Commercial positioning for continued strong growth
U.S. Commercial positioning for continued strong growth Significant headroom and increased penetration Segment Medical Specialty Capture headroom Significant Significant Select in existing headroom headroom markets Go deeper in new markets Attractive Meaningful Enhanced Middle sustained specialty Ma
Slide 61: U.S. Government: Market Strategy and Growth Priorities
U.S. GOVERNMENT MARKET STRATEGY AND GROWTH PRIORITIES Brian Evanko President, U.S. Government
Slide 62: Cigna's Government Business
Cigna’s Government Business Medicare Medicare Medicare Individual and Medicaid Advantage Part D Supplement Family Plans Key growth drivers: • Our strong foundation • The benefits of Cigna’s combination with Express Scripts • An accelerated geographic and product expansion strategy © 2019 Cigna
Slide 63: A look at our Medicare Advantage presence today
A look at our Medicare Advantage presence today Strong value proposition driving differentiated outcomes Top three position in 80% of our local markets Targeted geographic footprint in 16 states Individual HMO Current Medicare Advantage footprint solutions © 2019 Cigna
Slide 64: Meaningful opportunities for expansion
Meaningful opportunities for expansion High population of seniors Current Medicare Advantage footprint Cigna Collaborative Care® arrangements © 2019 Cigna
Slide 65: Our solid foundation for growth
Our solid foundation for growth Deep provider engagement and Over 85% of MA customers in mature value- value-based arrangements based models Strong customer Achieved top J.D. Power ranking satisfaction among national peers 77% of Cigna customers will be Outstanding in a 4-Star or higher rated plan i
Slide 66: Leveraging the combination with Express Scripts
Leveraging the combination with Express Scripts Express Scripts capabilities Medicare’s share • Home delivery of the nation’s • Strong network of retail pharmacies retail prescription • eviCore’s care management programs drug spending increased from • Strengthened customer experience 18% in 2006 to
Slide 67: Continued strong Medicare Advantage market growth
Continued strong Medicare Advantage market growth Medicare Advantage enrollees 72 million 63 million Medicare eligibles Traditional Medicare enrollees Medicare eligibles 46 million 30 million+ Medicare eligibles 22 million 11 million 41 million 42 million 35 million 2010 2019 2025 24% MA penetration
Slide 68: Expanding our Medicare Advantage addressable market
Expanding our Medicare Advantage addressable market 2025 Nearly four times our current footprint 2019 Cigna 4 million Group Footprint 4 million Cigna MA Footprint Individual Group HMO Individual MA HMO Non-Cigna Cigna Individual Non-Cigna Footprint 5 million PPO 15 Footprint 15 Individual Individual
Slide 69: Accelerating our Medicare Advantage customer growth
Accelerating our Medicare Advantage customer growth 10%-15% TARGET FOR MA AVERAGE ANNUAL CUSTOMER GROWTH OVER THE LONG TERM Driven by growth in: • Individual HMO in existing markets • Individual PPO in existing markets • Individual HMO/PPO in new markets 2019 2020 2021 2022 2023 2024 2025 Group MA w
Slide 70: Our Government business is well-positioned for growth
Our Government business is well-positioned for growth We will significantly expand Medicare Advantage markets and offerings in 2020 and beyond Leveraging our strong foundation, including our local market HMO model Expanding to new geographies, aided by Cigna commercial footprint and leading pharmacy
Slide 71: International Markets: Market Strategy and Growth Priorities
INTERNATIONAL MARKETS MARKET STRATEGY AND GROWTH PRIORITIES Jason Sadler President, International Markets © 2019 Cigna
Slide 72: International Markets – customers and clients
International Markets – customers and clients Key Buying Groups: Corporations Europe North America China Governments Turkey India South Korea Intergovernmental Organizations (IGO’s) Middle East Asia Pacific Non-Governmental Organizations (NGO’s) Individuals New Zealand 30+ COUNTRIES/ 14+ MILLION 5,0
Slide 73: Cigna International Markets – key differentiators
Cigna International Markets – key differentiators Deep Local talent Global Continuous Local license customer and operating provider innovation base insights model network Driving sustained growth © 2019 Cigna
Slide 74: Track record of International Markets' success
Track record of International Markets’ success USD’B Adjusted Revenue USD’M Pre-tax Earnings 13.7% $6.0 $800.0 Margin 8% 14% $5.0 CAGR 11.6% CAGR $600.0 Margin $4.0 $3.0 $400.0 $5.4 $735 $4.9 $654 $4.3 $4.5 $2.0 $538 $501 $200.0 $1.0 $0.0 $0.0 2015 2016 2017 2018 2015 2016 2017 2018 © 2019 Cigna
Slide 75: Market forces support growth
Market forces support growth Growth of the Impact of aging Rise of Social safety nets middle class population chronic diseases becoming less secure By 2030, two-thirds of 1.5 billion people 60% of all people who US$1.8 trillion the global middle class age 60+ around suffer from diabetes health gap i
Slide 76: A focused strategy of execution
A focused strategy of execution Continuous Planting seeds for Go deeper innovation and long-term growth reinvestment © 2019 Cigna
Slide 77: Go deeper: South Korea
Go deeper Entered South Korea in 1987 Serve 3.3 million customers Customers on average hold two policies with Cigna South Korea © 2019 Cigna
Slide 78: Go deeper: Middle East
Go deeper Operations in the UAE, Lebanon, Oman, Kuwait, Saudi Arabia, and Bahrain Small and medium enterprises comprise 94% of all businesses in the UAE Middle East © 2019 Cigna
Slide 79: Go deeper through acquisitions
Go deeper through acquisitions Expand value proposition in New Zealand to deliver peace of mind to local customers © 2019 Cigna
Slide 80: China: Continuous innovation and reinvestment
China: Continuous innovation and reinvestment 4.2% Insurance penetration HEALTH 33% REVENUE 25 LOCAL NETWORK COMPOUND OFFICES IN 15 OF 780 ANNUAL Current operations PROVINCES HOSPITALS GROWTH IN 56 CITIES RATE 2015-18 Expansion in 2019 Expansion in 2020-2021 Source: 2018 China Banking and Insurance
Slide 81: Cigna International Markets – well positioned for sustained growth
Cigna International Markets – well positioned for sustained growth Secular Proven Talent Continuous Planting seeds growth in local market innovation for future growth middle class capabilities Driving strong long-term earnings growth © 2019 Cigna
Slide 82: Financial Update
FINANCIAL UPDATE Eric Palmer Executive Vice President and Chief Financial Officer
Slide 83: Key differentiators
Key differentiators PROVEN CLEAR FOUR OUTSTANDING TALENT AND TRACK STRATEGIC GROWTH FINANCIAL CULTURE RECORD DIRECTION PLATFORMS FLEXIBILITY Health Services Commercial Government International Markets Competitively attractive long-term growth © 2019 Cigna
Slide 84: Track record
Track record Focus on the customer – lead through change We delivered: We achieved: 4% average medical cost trend over last 7 years 9 consecutive years of organic Commercial 650+ physician collaboratives enrollment growth Continued innovation of specialty solutions Strong margins and operating cash
Slide 85: Medical cost trend versus industry
Medical cost trend versus industry Medical cost trend 2019 medical cost trend guidance 7.5% AET (CVS) 6.5% 5.5% ANTM UNH : ~6% +/- 50 bps 4.5% 3.5% 2.5% Cigna: 3.5% to 4.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 CI AET ANTM UNH Industry-leading trend drives retention and customer growth Cigna
Slide 86: Pharmacy cost trend versus industry
Pharmacy cost trend versus industry 2017 pharmacy cost trend 2018 pharmacy cost trend Decreased Decreased Commercial Specialty Commercial Specialty costs costs 1.5% 11.3% 44% v 0.4% 9.4% 50% 1.9% 12.9% 42% 3.3% 11% 44% not reported not reported Driving consistently lower trend for customers and pati
Slide 87: 2019 guidance reaffirmation
2019 guidance reaffirmation Earnings $6.24B to $6.4B EPS $16.25 to $16.65, +14% to +17% Adjusted revenues $132.5B to $134.5B Medical care ratio 80.5% to 81.5% SG&A expense ratio 10.0% to 10.5% Operating cash flow: Medical customer $X.XB to $X.XB growth +300K to +400K Adjusted pharmacy scripts 1.17B
Slide 88: Health Services guidance
Health Services guidance Health Services 2019 pre-tax earnings guidance: $5.05B to $5.2B Cigna outlook as of May 31, 2019 © 2019 Cigna
Slide 89: Recast Express Scripts 2018 earnings guidance
Recast Express Scripts 2018 earnings guidance $ in Millions ~$310 $5,350 ~$120 $4,920 2018 ESRX core Depreciation EVI costs 2018 Recast ESRX EBITDA guidance and reclassification core pre-tax earnings midpoint amortization guidance © 2019 Cigna
Slide 90: Projected Health Services earnings growth in 2019
Projected Health Services earnings growth in 2019 $ in Millions ~$0 to $150 ~$200 ~$60 ~$270 $5,050 ~ 0% to 3% growth $4,920 to $5,200 2018 Recast Resegmentation Stranded Synergies Core 2019 Health ESRX core and other* overhead earnings Services pre-tax pre-tax earnings growth earnings guidance guid
Slide 91: Positioned for growth
Positioned for growth Cigna Organic growth – New products and + enhanced value New markets expanded reach Express Scripts proposition © 2019 Cigna
Slide 92: 2019 to 2021 adjusted pharmacy scripts
2019 to 2021 adjusted pharmacy scripts Expect paced annual core adjusted script growth plus Cigna volume insourcing 1.40B + ~50M to 75M ~1.4B + ~165M 1.17B to 1.19B 1.15B 2019 adjusted scripts Cigna scripts Core Health 2021 adjusted guidance insourcing fully by Services adjusted scripts 2021 script
Slide 93: 2021 key metrics
2021 key metrics ~1.4B adjusted Debt to cap ratio < 40% pharmacy scripts $450M to $500M CPI-level medical of administrative cost trend synergies $20 to $21 of EPS © 2019 Cigna
Slide 94: Clear path to 2021 EPS target
Clear path to 2021 EPS target $21 ↑ ~$0.70 ↑ ~$0.40 ↑ ~$0.70 $20 to $21 ↓ ~$0.20 ↑ ~$0.60 ↑ ~$2.20 $16.25 to $15 $16.65 2019 EPS Core PYD Deleveraging Administrative Removal of Accretive 2021 EPS target guidance business and synergies stranded capital growth HIF overhead deployment Cigna outlook as
Slide 95: Capital efficient model
Capital efficient model Services based Partner oriented All businesses generating compelling capital returns © 2019 Cigna
Slide 96: Capital deployment priorities
Capital deployment priorities Near term: Reinvestment in businesses Deleveraging to debt-to- Ongoing: Strategic M&A capitalization ratio < 40% Return capital to shareholders Significant financial flexibility © 2019 Cigna
Slide 97: Cash flow from operations
Cash flow guidance metric Cash flow from operations © 2019 Cigna
Slide 98: Cash flow from operations targets
Cash flow from operations targets >$8.5B ~$8B ~$1.5B ~$7B ~$1.2B to $1.7B ~$1.5B ~$0.8B ~$7.7B $3.8B ~$0.8B ~$4.2B ~$4.5B to $5.0B $2.9B $0.3B $0.5B $0.1B ~$0.8B 2018 2019 2020 2021 Surplus & other Debt repayment Capital expenditures Share repurchase Growth capital Significant cash flow creation dri
Slide 99: Strategic M&A priorities
Strategic M&A priorities Seniors Care Data analytics State-based Global footprint capabilities coordination and digital high-risk program and facilitation capabilities capabilities © 2019 Cigna
Slide 100: Long-term target margins, earnings growth and revenue growth
Long-term target margins, earnings growth and revenue growth Long-term adjusted Long-term Long-term adjusted Business before-tax margins earnings growth revenue growth Enterprise 5.5% to 6.5% 6% to 8% 6% to 8% Health Services 4.5% to 5.5% 3% to 5% 3% to 5% Commercial 12% to 14% 8% to 10% 8% to 10% G
Slide 101: Long-term EPS growth target post 2021
Long-term EPS growth target post 2021 Long-term EPS outlook Earnings contribution 6% to 8% Accretive capital deployment 4% to 5% Earnings per share 10% to 13% © 2019 Cigna
Slide 102: Key takeaways
Key takeaways Financial flexibility: Momentum and Strong earnings Clear strategic strong cash flow visibility into growth and return focus from operations growth drivers on capital and capital returns Competitively attractive near-, mid-, and long-term growth © 2019 Cigna
Slide 103: Closing Remarks
CLOSING REMARKS David Cordani President and Chief Executive Officer
Slide 104: Our purpose and mission
Our purpose and mission A global health service company dedicated to improving the health, well-being and peace of mind of those we serve. © 2019 Cigna 104
Slide 105: The transformative model
The transformative model Whole person health Serving as connective tissue Targeted innovation between doctors and individuals Driving affordability © 2019 Cigna
Slide 106: Strong confidence in our future
Strong confidence in our future PROVEN CLEAR TALENT FOUR OUTSTANDING TRACK STRATEGIC AND GROWTH FINANCIAL RECORD DIRECTION CULTURE PLATFORMS FLEXIBILITY © 2019 Cigna
Slide 107: Delivering value and growth
Delivering value and growth CPI level medical trend in 2021 10%–13% $20–$21 long-term target EPS average annual in 2021 EPS growth © 2019 Cigna
Slide 108: Appendix
APPENDIX 2019 we pe INVESTOR DAY Né Cigna.
Slide 109: Definitions of Key Financial and Business Terms
Appendix 1 Definitions of Key Financial and Business Terms Cigna's medical cost trend includes all U.S. commercial employer funding arrangements. For Health Services’ adjusted pharmacy scripts, non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by t
Slide 110: Definitions of Key Financial and Business Terms (continued)
• products as managed care alternatives to publicly funded health care programs. The segment also offers individual health insurance coverage both on and off the public exchanges. • International Markets segment is focused on health care and supplemental products and services to meet the needs of lo
Slide 111: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix Reconciliation of GAAP to Non-GAAP Financial Measures Year Ended 12/31/2009 12/31/2018 Revenues (in billions) Total revenues $ 18.3 $ 48.7 Adjustment for transitioning clients - (0.5) Special item - (0.1) Adjusted revenues $ 18.3 $ 48.1 Year Ended EPS (Diluted) 12/31/2009 12/31/2018 Shareho