Health insurance and services company Cigna Group plans to generate $3 billion in cost savings, about 20 percent of the company’s 2025 selling, general and administrative expenses, through 2030.

Speaking at their recent investor day, Cigna President and CEO Brian Evanko said some of that $3 billion will be reinvested into growth initiatives while some will contribute to earnings growth, which Evanko and his team want to be between 10 percent and 14 percent over the long term. Evanko and other Cigna leaders said the plan will focus on streamlining workflows and decision-making and equipping more of Cigna’s more than 60,000 employees with more AI and other technology tools. Evanko characterized it as “making the best use of technology to drive our cost structure down.”

Another driver of expected savings over the next three-plus years will be “disciplined supplier and vendor management” as Cigna seeks to lower its own spending while focusing more intensely on treating patients with complex healthcare needs. (About 55% of the spending the company touches comes from just 8% of patients.) The goal, Evanko told investors and analysts, is to build “affordability and personalization at scale” in the company’s insurance, pharmacy-benefit and care management/specialty products divisions.

The $3 billion savings-and-productivity push – which amounts to about 1.1 percent of Cigna’s total medical, benefit, pharmacy, service and administrative spending last year – is designed to help grow the company’s profit margin to about 11 percent and have it generate roughly $50 billion in cash flow from operations through the end of 2030. Among the other highlights from executives’ presentation to investors and analysts were:

• Examples of AI adoption already underway: In talking about projects such as a virtual assistant and the building of personalized support systems through technology, Chief Data, Digital and AI Officer Katya Andresen said AI has helped cut the time clinicians spend on documentation by up to 90 percent while Cigna’s specialty pharmacy benefit review process is now 43 times faster and takes an average of just 21 seconds. Andresen also told the audience that using virtual agents is helping Cigna’s care managers be more precise and personalized with their interventions while contributions to a drop of $2,000 per year in medical costs for many patients.
• Smaller is better on the insurance side: Bryan Holgerson, president of Cigna Healthcare U.S. and the company’s executive vice president of customer health outcomes, said Cigna’s Select segment serving employers with up to 500 people with an integrated medical, pharmacy and behavioral offering is “our targeted growth engine” in insurance. Today, Cigna has a market share of 8 percent in that space, Holgerson said, but that goal is to grow by a net 800,000 people by 2030 and push that share to 10 percent.
• Bolt-on buys are most likely: Big names in several sectors across the economy have made major acquisitions in recent years but CFO Ann Dennison said the Cigna team’s focus remains on smaller deals that help grow their strategic priorities. “Our portfolio is strong and M&A is not necessary for us to achieve the [earnings growth] commitment we’re making here today,” Dennison said.

Shares of Cigna (Ticker: CI) closed at about $282 on Oct. 13, some two weeks after the investor day, when they ended trading around $272. Over the past six months, they have risen slightly, growing the company’s market capitalization to more than $74 billion.

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.