Cigna will increase venture capital spending on startups and digital technologies
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CIgna will pour an additional $450 million into its venture capital fund, Cigna Ventures, in an effort to increase spending on start-ups and digital health, the company announced this week.
In addition to injecting additional cash into the venture capital fund, the insurer plans an investment in innovations that includes $1.25 billion in capital expenditures, as part of an offer to keep pace with other insurers who have made similar investments in technology.
The company said it intends to continue to make strategic investments in innovation through targeted “integrated or integrated” acquisitions, as well as establishing positions in early-stage companies through through the venture capital industry.
The $450 million allocated to Cigna Ventures will focus on maximizing impact in three key areas: insights and analytics; digital health and experience; and care delivery and empowerment.
WHAT IS THE IMPACT
The insurer has made a number of investments in recent years, around 20 in total, including startups and companies such as Ginger, Omada, Buoy, Cricket Health and BabyScripts, among others.
“Cigna Ventures invests in areas of strategic interest to Cigna and where we can partner with an entrepreneur to help the startup grow and also bring value to Cigna’s customers, customers and suppliers,” according to a door. -word of the company.
Cigna expects to generate more than $12 billion in deployable capital in 2022, including $5.4 billion in after-tax proceeds from the previously announced sale of its international life, casualty and supplemental business in seven countries.
This builds on the capital Cigna returned to shareholders in 2021, including $7.7 billion in share buybacks and $1.3 billion in dividends, the insurer said.
At Cigna’s board meetings in February, directors approved an aggregate increase of $6 billion in additional stock repurchase authorization, bringing the company’s total stock repurchase authorization to $10 billion. So far this year, Cigna has repurchased $1.2 billion of its stock.
The company plans to deploy more than $7 billion for share buybacks this year, as the company said it is not currently considering any large-scale mergers or acquisitions.
“Our significant share buyback plans, coupled with our recently increased dividend, reinforce the confidence we have in our long-term growth plans and the underlying earning power of Cigna’s business portfolio,” said David. Mr. Cordani, President and CEO of Cigna. “This reflects the continued and efficient deployment of capital for shareholders.”
THE GREAT TREND
The insurer launched Cigna Ventures in 2018 with $250 million in capital to invest in early-stage and growth-stage startups. The investments were targeted to emerging companies that are driving healthcare innovation in the strategic areas of analytics and analytics, digital health and retail, and delivery. and care management.
Cigna Ventures is an indirect wholly-owned subsidiary of Cigna Corporation which includes subsidiary Cigna Health and Life Insurance Company.
Cigna has previously invested in venture capital activities, including working with five venture capital partners and an equal number of existing direct investments. These include leading the C1 funding round with Omada Health and investments in Prognos, Contessa Health, MD Live and Cricket Health.
Optum, a subsidiary of UnitedHealth Group, created a venture capital fund the previous year.
Optum Ventures invests in companies that use data and information to improve healthcare services. Its initial investments included Apervita, a cloud-based platform, Buoy Health’s AI-powered digital health assistant, Mindstrong Health, which uses AI and machine learning for smartphone interactions and SHYFT Analytics, a cloud-based data and analytics platform.
“We see significant value in Cigna’s equity and will prioritize share buybacks in 2022 over large-scale mergers or acquisitions,” said Brian Evanko, Cigna’s chief financial officer. “Beyond our expectation to allocate a significant portion of deployable capital to share buybacks this year, our strong capital position and cash flow continue to give us financial flexibility and option for strategic investments and targeted acquisitions.”