Cigna forecast annual profit below Wall Street expectations on Thursday and missed estimates for the fourth quarter, as high-cost claims in employer-sponsored plans drove up expenses in its backup insurance product.

Wall Street's main indexes rose on Thursday, driven by post-earnings advances in Meta and Tesla, although Microsoft's weak cloud forecast and downbeat results from Cigna dampened investor enthusiasm. Microsoft MSFT.O dropped 4.7% after forecasting disappointing growth in its cloud computing business.

Cigna blamed lower-than-expected fourth-quarter returns on its stop-loss insurance business that insures employers from catastrophically high medical claims.

Fresh off underperforming Wall Street’s expectations in the fourth quarter, Cigna said it would work to lower costs for its customers amid widespread discontent with the healthcare system.

The plan, called "stop-loss insurance", entails the insurer covering for employers' self-funded plans when their costs surpass a certain threshold due to catastrophic or unexpected medical claims

Shares of Cigna Group slid after the health insurer warned that higher health-care costs in one insurance unit weighed on profitability. Insurers saw profit margins soar in the pandemic as insurees sought out fewer discretionary medical services.

Cigna said its medical loss ratio was 87.9% in Q4 2024, compared to 82.2% in the prior-year quarter. For the full-year 2024, MLR was 83.2%, which was still higher compared to the 81.3% its insurance unit reported in 2023.

Cigna’s quarterly earnings fell well short of Wall Street’s expectations, as high healthcare costs hurt results in a segment of its insurance business. The company, parent of a pharmacy-benefit manager as well as its namesake insurer,

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Australia’s S&P/ASX 200 looks set to end the trading week on a positive note and potentially a fresh record. Niccol said the company made progress on its “Back to Starbucks” plan in the first quarter. The tech giant revealed its earnings report Wednesday.

Cigna Group closed 23.69% below its 52-week high of $370.83, which the company reached on September 16th.