Cigna Group (CI) – shares moved sharply lower(-7%) Wednesday following a report from the Wall Street Journal that the health insurance group is involved in merger talks with its smaller rival Humana (HUM).
Humana had a market capitalization of roughly $62.84 billion and Cigna had a market value of $83.71 billion, based on Tuesday’s closing prices.
The Journal said the pair are discussing a cash-and-stock deal that would create one of the largest health insurers in the country and challenge the market dominance of UnitedHealth (UNH) – which is valued at around $500 billion.
Earlier this month, Humana echoed concerns expressed by UnitedHealth over the summer that older Americans who had postponed elective surgeries during the Covid pandemic were now seeking treatments that could elevate costs and weigh on profit margins.
The group’s benefit-expense ratio, which tracks payouts on claims against collected premiums, rose by more than a percentage point from last year to 86.4%.