David Cordani has competed in over 125 triathlons. He also runs as a guide in marathons with disabled veterans. He is passionate about health and helping people. He is also CEO of Cigna (CI: NYSE), one of the largest medical insurance and health service companies in the world.
He wants Cigna to be a leader in the US and global healthcare. Thus, he is leading the company with vision, passion, and innovation. Since taking over, Cigna’s market cap has increased by over 6.5 times.
David is passionate about the US healthcare system and Cigna’s role in it.
“Healthcare is a $3.2tr industry. Nobody is printing enough money to maintain the status quo of its inherent trajectory.”
David believes that the combination of rising medical costs and chronic lifestyle diseases is putting the healthcare system under unsustainable pressure. With Cigna being one of the largest corporate health insurance providers, he sees the numbers every day.
“My generation stands to fail my children.”
But David isn’t just a doomsayer. He has the vision to turn things around with the strategic leadership to match. And he wants Cigna to be at the forefront. His key strategy is to continue to transform Cigna into a leading health services provider.
David believes that Cigna should not only fund the treatment of sickness (through insurance) but also work to help prevent those sicknesses in the first place. In 2018, Cigna acquired Express Scripts, a pharmacy benefit management company and a fellow Fortune 500 company, for $54bn.
David has also set the twin strategic goals of improving individual healthcare quality while reducing the growth rate of costs.
“Society demands improved accessibility, improved affordability, improved personalization to get overall improved value. And those that are best positioned to deliver on that will win.” “We’re delivering the lowest cost growth in the industry, and we have for the last seven years. We’re seeking to cut that rate of growth in half again.”
And to achieve these goals, he champions innovation. Cigna has embraced big data and AI. It now also innovates in its relationships with physicians and in its services. For example, Cigna developed the Patient Assurance Program for diabetics within 8 weeks once the need was identified. The program caps the monthly costs for diabetics to $25.
Since David became CEO in 2009, Cigna’s revenue has increased by around 735 percent to $153.7bn in 2019. Revenue jumped by 217 percent in 2019 alone, reflecting the first year after acquiring Express Scripts. The share price has increased by around 429 percent since David took over.
Momentum in the share price was strong late last year and early this year. But COVID-19 saw a fall in the share price and momentum in March. The share price rallied strongly in April, but the rally did not restore upward momentum. Since April, the share price has drifted slowly down.
The small columns in the MACD histogram show that there has been very little conviction with the stock despite the positive surprise in its earnings announcement for Q2 2020, and full-year revenue guidance is similar to 2019’s result. However, the low histogram results may also indicate that the share price could be nearing a point of breakout. Keep watching the stock closely to see which way it goes.