Cigna Group shares fell sharply after the health insurer reported fourth-quarter profit that was dragged down by medical costs, a trend that’s concerned investors in the sector for months.

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.

Cigna (CI) stock falls as the managed care company's Q4 2024 earnings miss the consensus due to an unexpected rise in medical costs. Read more here.

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,

Cigna forecast annual profit below Wall Street expectations on Thursday and missed estimates for the fourth quarter, hurt by higher medical costs for a type of employer-sponsored healthcare plan. Shares of the company fell 6% to $284.