Cigna ramps up investments in venture arm
Cigna, one of the nation’s largest health insurance providers, announced new priorities for its capital deployment, including steering an additional $450 million into Cigna Ventures.
Overall, Cigna expects it will generate $12 billion of deployable capital in 2022, including $5.4 billion in after-tax proceeds from the previously announced sale of its international life, accident, and supplemental benefits businesses in seven countries. Already, Cigna has prioritized $6 billion more in share repurchases after the board of directors approved the aggregate increase during a February board meeting. Cigna made $7.7 billion in share repurchases in 2021 and returned $1.3 billion in dividends to shareholders. Year to date, the company has completed $1.2 billion in share repurchases.
The move pushes fresh funding into Cigna’s healthcare venture capital arm. Cigna Venture aims to maximize impact across three key areas: insights and analytics; digital health and experience; and care delivery and enablement.
Cigna Ventures will continue making strategic investments in innovation through targeted bolt-on or tuck-in acquisitions, along with establishing positions in earlier-stage companies. However, the healthcare company noted it will put big mergers and acquisitions on the back burner in lieu of its new capital deployment priorities.
"We see meaningful value in Cigna's equity, and will prioritize share repurchase in 2022 over large-scale mergers or acquisitions," said Brian Evanko, Chief Financial Officer, Cigna. "Beyond our expectation to allocate a significant portion of deployable capital for share repurchase this year, our strong capital position and cash flow continues to give us financial flexibility and optionality for strategic investments and targeted bolt-on acquisitions."
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Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."