(Reuters) – Health insurer Cigna Corp (CI.N) raised its annual adjusted profit forecast on Friday, following a decline in COVID-related costs and no sign of pent-up demand for medical procedures that were delayed due to the pandemic.

Shares of the company shot up nearly 5% to $263.7 in early trading, after it also reported first-quarter profit above estimates.

Signage for Cigna is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly

Health insurers came under pressure from volatile medical costs during the pandemic, but some of that was offset by people postponing non-urgent medical procedures.

“We are not seeing any acuity spikes or pent-up demand emerge for things like blood screenings, preventive exams, mammograms, colonoscopy,” Chief Financial Officer Brian Evanko said during a post-earnings call.

“Non-COVID shaping up very much in line with what we had been expecting this year.”

A drop in COVID testing and treatment costs also helped Cigna report a lower-than-expected medical care ratio (MCR), the amount spent on medical claims versus income from premiums.

Total medical customers of its health plans rose to 17.8 million in the quarter, boosted by growth in U.S. commercial membership.

“Cigna turned in better-than-anticipated operating results for Q1 that allowed management to boost its 2022 outlook a bit, primarily due to strength in its medical insurance operations where its commercial operations really shined for the first time since the pandemic began,” said Morningstar analyst Julie Utterback.

The company moderately raised its forecast for 2022 adjusted profit from operations to at least $22.60 per share, from a minimum of $22.40 per share expected earlier.

“Company offers attractive value, especially if COVID-related pressures continue to improve in 2022,” Oppenheimer analyst Michael Wiederhorn said in a note.

Excluding special items, Cigna’s income from operations was $6.01 per share, above analysts’ average estimate of $5.18, according to Refinitiv IBES data.

Reporting by Mrinalika Roy in Bengaluru; Editing by Shounak Dasgupta, Shinjini Ganguli and Devika Syamnath

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