CI Cigna Group - 10-K

Item 1A. RISK FACTORS

As a large global health company operating in a complex industry, we encounter a variety of risks and uncertainties, which could have a material adverse effect on our business, liquidity, results of operations, financial condition or the trading price of our securities. You should carefully consider each of the risks and uncertainties discussed below, together with other information

contained in this Form 10-K, including the MD&A. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect us. The following risk factors have been organized by category for ease of use; however, many of the risks may have impacts in more than one category. These categories, therefore, should be viewed as a starting point for understanding the significant risks facing us and not as a limitation on the potential impact of the matters discussed. Risk factors are not necessarily listed in order of importance.

Risks Related to Our Business as a Health Company

We must predict, price for and manage health care costs appropriately. We face price competition and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers.

Our profitability depends in part on our ability to accurately predict, price for and effectively manage future health care costs. Relatively small differences between predicted and actual medical costs or utilization rates as a percentage of revenue can result in significant changes in our financial results. In addition to appropriately pricing health care costs, we must accurately manage costs through medical management, product design, negotiation of favorable provider contracts and underwriting criteria. Our health care costs are also affected by external events that we cannot forecast or project and over which we have little or no control, including changes in laws and regulations, costly new treatments, new treatment guidelines, provider billing practices, inflation and changes in customers' health care utilization patterns, pandemics, natural disasters, and other large-scale medical emergencies. If we do not accurately price our health care costs, our business, cash flows, financial condition and results of operations could be materially adversely impacted.

While we compete on the basis of many service- and quality-related factors, we expect that price will continue to be a significant basis of competition. Our client contracts are subject to negotiation as clients seek to contain their costs, including by reducing benefits offered. Increasingly, our clients seek to negotiate performance guarantees that require us to pay penalties if the guaranteed performance standard is not met. Clients can easily move between our competitors and us. Our clients are well-informed and typically have knowledgeable consultants who seek competing bids from our competitors before contract renewal. For example, our Express Scripts client contracts generally have three-year terms and may be subject to periodic renegotiation of pricing terms based on market factors. If one or more of our large clients terminates or does not renew a contract for any reason, or if the provisions of a contract with a large client are modified with terms less favorable to us, our results of operations could be adversely affected, and we could experience a negative reaction in the investment community.

A significant loss of customers or clients resulting from our need to increase or maintain premiums, administrative fees or reimbursement levels could adversely affect our business, cash flows, financial condition and results of operations. In addition, as brokers and benefit consultants seek to enhance their revenue streams, they look to take on services that we typically provide. Each of these events could negatively impact our financial results.

Strong competition within the pharmacy benefit business has generated greater demand for lower product and service pricing, increased revenue sharing, and enhanced product and service offerings. These competitive factors have historically applied pressure on our operating margins and caused many companies, including us, to reduce the prices charged for products and services while sharing with clients a greater portion of the formulary rebates and related fees received from pharmaceutical manufacturers. If we are unable to respond effectively, including through the implementation of a rebate-free model for our pharmacy benefit services clients, these trends could negatively impact our ability to attract or retain clients or sell additional services, which could negatively impact our margins and have a material adverse effect on our business and results of operations. In addition, legislative reforms and regulatory or executive actions related to rebates, reporting, owned pharmacies and other activities may adversely affect our ability to price our pharmacy products and services appropriately, as well as our competitive position, cash flows, financial condition and results of operations.

Premiums in the Cigna Healthcare segment are generally set for a one-year period and are priced well in advance of the date on which the contract commences or renews. Federal and state regulatory agencies may restrict or prevent entirely our ability to implement changes in premium rates or collect certain administrative fees. Fiscal or other concerns related to the government-sponsored programs in which we participate may cause decreasing reimbursement rates, delays in premium payments, restrictions on implementing changes in premium rates or insufficient increases in reimbursement rates. Our participation in health insurance exchanges through our IFP offerings in certain states involves uncertainties associated with mix and volume of business and could adversely affect our results of operations, financial position and cash flows.

We operate in a highly competitive and evolving business environment, and our failure to compete effectively or differentiate our products and services from those of our competitors could materially adversely affect our results of operations, financial position and cash flows.

We operate in a highly competitive, evolving and rapidly changing industry. Industry shifts have resulted and could result from, among other things:

• a large intra- or inter-industry merger or industry consolidation;

• strategic alliances;

• new or alternative business models or new government options or offerings;

• continuing consolidation among physicians, hospitals and other health care providers, as well as changes in the organizational structures chosen by physicians, hospitals and health care providers;

• new market entrants, including those not traditionally in the health services industry;

• the ability of larger employers and clients to contract directly with providers;

• technological changes and rapid shifts in the use of technology, such as telehealth and AI;

• the impact or consequences of legislation, executive actions or regulatory changes including premium rate increases, public debates over drug pricing, government involvement in drug pricing and purchasing, and public debate over current or proposed legislation;

• impacts to distribution channels, including changes to the United States Postal Service or the consolidation of shipping carriers;

• increased drug acquisition cost or unexpected changes to drug pricing trend;

• changes in the generic/biosimilar drug market or the failure of new generic/biosimilar drugs to come to market; and

• changes in utilization of health care, prescription drugs or other covered services and items, including under risk-based contracts in the health benefit management market and for those businesses that utilize risk adjustment methodology.

Any significant shifts in the structure of the industry could alter industry dynamics and adversely affect our ability to attract or retain clients and customers. Our failure to anticipate or appropriately adapt to changes in the industry could negatively impact our competitive position and adversely affect our business and results of operations.

We must remain competitive to attract new customers, retain existing customers and further integrate additional product and service offerings. We are subject to significant market pressures brought about by customer and client needs, legislative and regulatory developments, and other market factors. Our competitors may have greater, better or more established capabilities, resources, market share, reputation or business relationships, or lower profit margin or financial return expectations. Unless we can demonstrate greater value to our clients through innovative and cost-effective product and service offerings in the rapidly changing health care industry, we may be unable to remain competitive, which could have a material adverse effect on our business, results of operations, financial position and cash flows.

Additionally, to succeed in this highly competitive marketplace, we must maintain a strong reputation. Increasingly, our customers, clients and investors consider our efforts on a variety of matters that could impact our stakeholders, including our employees and the communities in which we operate. Our reputation may be negatively impacted by a failure to meet customer expectations for consistent, transparent, high-quality and accessible care or by other significant events, including a failure to execute on customer or client contracts or strategic or operational initiatives, failure to comply with applicable laws or regulations, or failure to innovate and deliver cost-effective products and services that demonstrate greater value to our customers. Negative publicity may come as a result of adverse media coverage, litigation against us and other industry participants, the ongoing public debates over the affordability, accessibility and transparency of health care, and social media and other media relations activities.

Changes in drug pricing or industry pricing benchmarks could materially impact our financial performance.

Contracts in the prescription drug industry, including our contracts with retail pharmacy networks and our pharmacy and specialty pharmacy clients, generally use pricing metrics published by third parties as benchmarks to establish pricing for prescription drugs. If these benchmarks are no longer published by third parties; if we, or our contractual partners, adopt other pricing benchmarks for establishing prices within the industry; if legislation or regulation requires the use of other pricing benchmarks; or if future changes in drug prices substantially deviate from our expectations, the short- or long-term impacts may have a material adverse effect on our business and results of operations. Additionally, laws such as the Inflation Reduction Act have granted CMS the ability to negotiate drug prices for high-cost Medicare Part D and Part B drugs, and other federal and state legislative proposals and executive actions can lead to residual effects as drug companies adjust pricing strategies for broader marketplaces, impacting which medications are prioritized.

If we lose our relationship with one or more key pharmaceutical manufacturers, or if the payments made or discounts provided by pharmaceutical manufacturers decline, our business and results of operations could be adversely affected.

We maintain relationships with numerous pharmaceutical manufacturers, which provide us with, among other things, discounts for drugs we purchase to be dispensed from our home delivery and specialty pharmacies; discounts, in the form of rebates, for drug utilization; fees for administering rebate programs, including invoicing, allocating and collecting rebates; fees for services provided to pharmaceutical manufacturers by our specialty pharmacies; and access to limited distribution specialty pharmaceuticals by our specialty pharmacies.

Our contracts with pharmaceutical manufacturers are typically nonexclusive and terminable on relatively short notice by either party. The consolidation of pharmaceutical manufacturers, the termination or material alteration of our relationships, or our failure to renew contracts on market competitive terms could have a material adverse effect on our business and results of operations. In addition, arrangements between payors and pharmaceutical manufacturers have been the subject of debate in various public and governmental forums. Our announced commitment to developing a rebate-free model may alter manufacturer contracting dynamics. Adoption of new laws, rules or regulations, or changes in - or new interpretations of - existing laws, rules or regulations relating to any of these programs could materially adversely affect our business and results of operations.

If significant changes occur within the pharmacy provider marketplace, or if other issues arise with respect to our pharmacy networks, including the loss of or adverse change in our relationship with one or more key pharmacy providers, our business and results of operations could be adversely affected.

More than 65,000 pharmacies participated in one or more of our networks as of December 31, 2025. The 10 largest retail pharmacy chains represent approximately 47% of the total number of stores in our largest network. In certain geographic areas of the United States, our networks may be comprised of higher concentrations of one or more large pharmacy chains. Contracts with retail pharmacies are generally nonexclusive and are terminable on relatively short notice by either party. If one or more of the larger pharmacy chains terminates its relationship with us, or is able to renegotiate terms substantially less favorable to us, our customers' access to retail pharmacies or our business could be materially adversely affected. We could also face harm to our relationships with large pharmacy chains depending upon changing competitive conditions. Changes in the overall composition of our pharmacy networks, including changes due to legislative, regulatory or executive action, or reduced pharmacy access under our networks, could have a negative impact on our claims volume or our competitiveness in the marketplace, which could cause us to fall short of certain guarantees in our contracts with clients or otherwise materially adversely impact our business or results of operations.

The reserves we hold for expected medical claims are based on estimates that involve an extensive degree of judgment and are inherently variable. If actual claims exceed our estimates, our operating results could be materially adversely affected, and our ability to take timely corrective actions to contain future costs may be limited.

We maintain and record medical claims reserves in our Consolidated Balance Sheets for estimated future payments. Our estimates of health care costs payable are based on a number of factors, including historical claim experience. This estimation process requires extensive judgment. Considerable variability is inherent in such estimates, and the accuracy of the estimates is highly sensitive to a number of factors including, among others, changes in medical claims submission and processing patterns or procedures; changes in customer base and product mix; changes in the utilization of prescription drugs, medical or other covered items or services; changes in medical cost trends; changes in our health management practices; changes in regulations; and the introduction of new benefits and products. If we are not able to accurately and promptly anticipate and detect medical cost trends, our ability to take timely corrective actions to limit future costs and reflect our current benefit cost experience in our pricing process may be limited. Additionally, we must estimate the amount of rebates payable by us under the ACA's and CMS' minimum loss ratio rules and the amounts payable by us to, and receivable by us from, the federal government under the ACA's remaining premium stabilization program. Because establishing reserves is an inherently uncertain process involving estimates of future losses, there can be no certainty that ultimate losses will not exceed existing reserves, which may adversely affect our results of operations, financial position and cash flows.

If we fail to develop and maintain satisfactory relationships with health care payors, physicians, hospitals and other health service providers and with, producers and consultants, our business and results of operations may be adversely affected.

We contract with or employ physicians, hospitals and other health service providers and facilities to provide health services to our customers and patients. We also contract with health care payors (as a service provider to those payors). Our results of operations depend on our ability to contract for these services at competitive prices. In any particular market, physicians, hospitals and health service providers may enter into exclusive arrangements with competitors or simply refuse to contract with us, demand higher payments, or take other actions that could result in higher medical costs or less desirable products or services for our customers. In some markets, certain providers, particularly hospitals, physician/hospital organizations and multi-specialty physician groups, may have significant or controlling market positions that could result in a diminished bargaining position for us. If providers refuse to

contract with us, use their market position to negotiate more favorable contracts or place us at a competitive disadvantage, our ability to market products or to be profitable in those areas could be materially adversely affected. Additionally, certain regulations may impact our ability to obtain competitive prices. We establish collaborative care arrangements with physician groups, specialist groups, independent practice associations, hospitals and health care delivery systems to improve quality outcomes and medical cost performance. If such collaborative arrangements do not result in the lower medical costs that we project or do not improve value to our customers and clients, if we fail to attract health care providers to such arrangements or if we are less successful at implementing such arrangements than our competitors, our attractiveness to customers may be reduced and our ability to profitably grow our business o r improve value for our customers, patients and clients may be adversely affected.

Our ability to develop and maintain satisfactory relationships with providers may also be negatively impacted by other factors not associated with us, such as increasing pressure on revenue and other pressures on health care providers; increasing consolidation activity among hospitals, physician groups and providers; and changes in Medicare or Medicaid reimbursement levels or programming. Many factors, including continuing consolidation among physicians, hospitals and other providers; the growth of accountable care organizations; vertical integration of providers and other entities; changes in the organizational structures chosen by physicians, hospitals and providers; new market entrants, including those not traditionally in the health services industry; and the use of new modes of health care delivery, including virtual care services, may affect the way providers interact with us and may change the competitive landscape in which we operate. In some instances, these organizations may compete directly with us, potentially affecting the way we price our products and services or causing us to incur increased costs if we change our operations to be more competitive.

Out-of-network providers for non-Medicare services are not limited by any agreement with us in the amounts they bill. While benefit plans place limits on the amount of charges that will be considered for reimbursement and regulations seek to prescribe payment levels, establish methodologies and dispute resolution processes, the outcome of disputes where we do not have a provider contract may cause us to pay higher medical or other benefit costs than we project.

Additionally, our products and services, including a broad range of medical, pharmacy, specialty health, and ancillary benefit offerings, are sold in part through non-exclusive producers and consultants for whose services and allegiance we compete. Our sales could be materially adversely affected if we are unable to attract, retain and support such independent producers and consultants or if our enterprise sales strategy is not appropriately aligned across product lines and producer relationships.

In managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities, we may be subject to additional liability that could result in significant time and expense.

In addition to contracting with physicians and other health care providers for services, we employ physicians, pharmacists, nurses and other health care providers at our home delivery and specialty pharmacies, onsite low-acuity and primary care practices that we manage and operate for our customers, and certain clinics for our employees. We also provide virtual primary care, urgent care, dermatology services and behavioral health services through clinicians that we employ, as well as through third-party contractors. As such, we may be subject to liability for certain acts, omissions or injuries caused by our employees or agents, or that occur at one of these practices, pharmacies or clinics. The defense of any actions may require diverting personnel and other resources and incurring significant costs that could have a material adverse effect on our business, results of operations, financial condition, liquidity and reputation.

There are various risks associated with participating in government-sponsored programs and providing services to payors who participate in government-sponsored programs, including dependence upon government funding, compliance with government contracts, and increased regulatory oversight and enforcement.

Our Evernorth Health Services business provides services to government entities and payors participating in government health care programs, and our relationships with these government entities are subject to laws and regulations regarding government contracts. Additionally, through our U.S. Healthcare business, we contract with CMS and various state government agencies.

Our revenues from government-funded programs, including our government clients, are dependent, in whole or in part, upon annual funding from the federal government or applicable state or local governments. Funding for these programs is dependent on many factors outside our control, including general economic conditions, continuing government efforts to contain health care costs, budgetary constraints at the federal or applicable state or local level, and general political issues and priorities. These entities generally have the right to not renew or to cancel their contracts with us on short notice without cause or if funds are not available. Unanticipated changes in funding, such as the application of sequestration by the federal or state governments, retroactive rate adjustments, a delay by Congress in raising the federal debt ceiling, or the failure to provide for continued appropriations or regular ongoing scheduled payments to us, could substantially reduce our revenues or profitability or impact our liquidity.

Additionally, if we fail to comply with applicable state or federal regulatory or contractual requirements, including data submission, enrollment and marketing, provider network adequacy, provider directory accuracy, quality measures, claims payment, continuity of care, timely and accurate processing of appeals and grievances, oversight of first-tier downstream and related entities, and call center performance, we may be subject to administrative actions, including enrollment sanctions or contract termination, fines or other penalties or enforcement actions that could materially impact our profitability.

Legal, Regulatory and Public Policy Risks Arising from Our Business

Our business is subject to substantial government regulation, and new laws or regulations or changes in existing laws or regulations could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Our business is regulated at the federal, state and international level. The laws and rules governing our business and related interpretations are increasing in number and complexity, are subject to frequent change, and can be inconsistent or in conflict with each other. Noncompliance with applicable regulations by us or third-party vendors could have material adverse effects on our business, results of operations, financial condition, liquidity and reputation.

We must identify, assess and respond to new trends in the legislative and regulatory environment, as well as comply with the various existing laws and regulations applicable to our business and respond to policymakers and enforcement agencies accordingly. We expect federal and state governments to continue to enact legislative and regulatory reforms that will or could materially impact various aspects of the health services system, including pharmacy benefits manager, drug pricing or insurance market reforms. These reforms could result in material changes to the way we conduct our business and could impact the market for our products.

Existing or future laws, regulations, actions by governmental or regulatory authorities, or judgments could force us to change how we conduct our business; affect the products and services we offer and where we offer them; restrict revenue and enrollment growth; increase our costs, including medical, operating, health care technology and administrative costs; increase our liability; and require enhancements to our compliance infrastructure and internal controls environment. For example, we are required to obtain and maintain approvals from state boards of pharmacy, departments of insurance, and other federal and state regulatory agencies to, among other things, market many of our products, expand into additional geographic or product markets, increase prices for certain regulated products, and consummate some of our acquisitions and dispositions. Delays in obtaining or failure to obtain or maintain these approvals could reduce our revenue or increase our costs. Additionally, we must maintain licenses and registrations in the jurisdictions in which we conduct business, and the suspension, material adverse modification or termination of such licenses and registrations could adversely affect operations. Such licensure subjects many of our business operations and products to state regulation, as well as risks associated with doing business in those jurisdictions. Failure to effectively implement or adjust our strategic and operational initiatives, such as reducing operating costs, adjusting premium pricing or benefit design, or transforming our business model in response to new laws, regulatory changes or executive actions may have a material adverse effect on our results of operations, financial condition and cash flows.

Our effective tax rate or tax payments could also be adversely affected by new laws or regulations, both within the United States and in other foreign jurisdictions in which we operate. While we believe that our historical tax positions are consistent with applicable laws, regulations and existing precedent, our tax positions could be challenged by relevant tax authorities, and we may not be successful in any such challenge. The market price of our securities may react to the announcement of such proposals.

Customers, investors, employees and other stakeholders have focused on corporate governance, environmental stewardship and social matters. Environmental, social and governance-related laws and regulations, including those aimed at restricting the consideration of these factors by companies and requiring climate- and sustainability-related disclosures, and related stakeholder expectations have resulted, and may in the future result, in increased expenses and management time and attention spent complying with or meeting such laws, regulations or expectations. Overall, environmental, social and governance matters, and related stakeholder reactions, which may be conflicting or divergent, may impact our reputation and have other business impacts which could adversely affect our business.

For more information on regulations affecting our business, see "Business – Regulation" in Part I, Item 1 of this Form 10-K.

If we fail to comply with applicable privacy, security and data laws, regulations and standards, our business and reputation could be materially adversely affected.

Most of our activities involve the receipt, use, storage, transmission or other processing of a substantial amount of PII, including PHI, as well as financial information (including payment card information) and other confidential and sensitive information about our clients and employees. The processing of such information is regulated at the federal, state, international and industry levels, and requirements are imposed on us by industry standards and contracts with clients. In some cases, such laws, rules, regulations, industry

standards and contractual requirements also apply to our vendors and require us to obtain written assurances of their compliance with such requirements.

At the federal level, we are subject to, among other laws and regulations, HIPAA, which requires business associates as well as covered entities to comply with specified privacy and security requirements. While we endeavor to provide appropriate protections through our contracts with our third-party service providers and in certain cases assess their security controls, we have limited oversight or control over their actions and practices. Several of our businesses act as business associates to their covered entity clients and, as a result, collect, receive, use, disclose, transmit and maintain PHI in order to provide services to these customers. If HHS alleges or finds noncompliance with HIPAA requirements or implements an enforcement action against us, it could have an adverse effect on our results of operations, financial position, cash flows and reputation. For example, in 2025, we responded to a voluntary HIPAA security rule audit from HHS's Office for Civil Rights ("OCR"). As participation in this audit was voluntary, the information provided did not result in any HIPAA enforcement action or civil monetary penalty; however, any serious compliance issues could open up subsequent compliance reviews that could include a range of remedies from OCR.

Additionally, we are, or may become, subject to U.S. state and international laws and regulations, as well as industry standards such as PCI DSS. These laws, regulations, rules, industry standards and contractual requirements are subject to change and the regulatory environment surrounding data security and privacy is increasingly demanding. Compliance with existing or new privacy, security and data laws, regulations and requirements may result in increased operating costs and may constrain or require us to alter our business model or operations. For more information on privacy regulations to which we are subject, see "Business – Regulation" in Part I, Item 1 of this Form 10-K.

Noncompliance or findings of noncompliance with applicable laws, regulations or requirements, or the occurrence of any privacy or security breach involving the misappropriation, loss or other unauthorized disclosure of PII, whether by us or by one of our third-party service providers, could materially adversely affect our business and reputation, including our results of operations, financial position and cash flows.

We face risks related to litigation, regulatory audits and investigations.

We are routinely involved in legal matters arising from our health services business, including but not limited to claims related to the dispensing of pharmaceutical products by our home delivery and specialty pharmacies; pharmacy benefit management services, such as formulary management services; health benefit management services; and provider services. Our pharmacy services operations are subject to liability arising from clinical quality, patient safety and other risks inherent in the dispensing, packaging and distribution of drugs, including claims related to purported dispensing and other operational errors.

We also have incurred and likely will continue to incur liability for practices and claims related to our health care business, such as marketing misconduct; failure to timely or appropriately pay for or provide health care services; provider network structure; poor outcomes for care delivered or arranged; provider disputes, including disputes over compensation or contractual provisions; ERISA claims; allegations related to calculations of cost-sharing; and claims related to our administration of self-funded business.

In addition, we are routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of business. These legal matters could include civil claims (including tort and breach of contract claims) as well as claims arising from alleged violations of certain laws (such as consumer protection or false claims act laws). There are currently, and may be in the future, attempts to bring class action lawsuits against the Company and other companies in our industry; individual plaintiffs also may bring multiple claims regarding the same subject matter against us and other companies in our industry.

In addition, various government agencies have conducted investigations, inquiries and audits into certain pharmacy benefit management practices, which in certain instances have resulted in litigation or other adverse outcomes for our Company. For example, the FTC has released two staff reports on PBMs and the accessibility and affordability of prescription drugs. In September 2024, the FTC filed an administrative complaint against Express Scripts and two other PBMs, among others, for allegedly engaging in anticompetitive and unfair rebate practices related to insulin drug pricing. In February 2026, we reached a final settlement with the FTC, which resolved all FTC matters and litigation without a monetary penalty, finding of fault or admission of liability. The settlement requires, among other things, updates to our business practices related to affordability of medications of Express Scripts customers.

We are frequently the subject of regulatory market conduct and other reviews, audits and investigations by state insurance, health and welfare and pharmacy departments; attorneys general; the DOJ; the FTC; CMS; the DOL; the HHS-OIG; and comparable authorities in foreign jurisdictions. Additionally, we have previously been, and may in the future be, subject to qui tam actions in which the government may or may not intervene. Although our Medicare Advantage and Medicare Part D businesses were included in the HCSC

transaction, we may have indemnification obligations in certain circumstances related to regulatory audits that were ongoing at the time that transaction was completed. There also continues to be heightened review by federal and state regulators of business and reporting practices within the health services industry, including with respect to claims payment and related escheat practices, and increased scrutiny by other federal and state governmental agencies (such as state attorneys general) empowered to bring criminal actions in circumstances that could have previously given rise only to civil or administrative proceedings.

Court decisions and legislative and regulatory activities may increase our exposure to any type of claim. In some cases, substantial noneconomic or punitive damages may be sought. We procure insurance coverage to cover some of these potential liabilities, and we also self-insure a significant portion of our litigation risks. While we maintain some third-party insurance coverage, including excess liability insurance with third-party insurance carriers, certain liabilities or types of damages, such as punitive damages, may not be covered by insurance, insurers may dispute coverage, or the amount of insurance may be insufficient to cover the entire damages awarded. Resolving disputes is often expensive and disruptive, regardless of the outcome. Additionally, it is possible that the resolution of current or future legal matters and claims could result in changes to our industry and business practices, losses material to our results of operations, financial condition, and liquidity or damage to our reputation.

Moreover, regulatory investigations and audits have resulted in, and could result in, sanctions or changes to our business practices, including retroactive adjustments to certain premiums, corporate integrity agreements, restrictions on our ability to participate in government programs or exclusion from such programs, and our ability to market certain products or engage in business-related activities. We cannot predict what effect, if any, such government investigations and audits may ultimately have on us or on the industry in general. However, we will likely continue to experience government scrutiny and audit activity, which has resulted in, and may result in, civil penalties. Any failure, or alleged failure, to comply with various state and federal health care laws and regulations, including those directed at preventing fraud, waste and abuse in government-funded programs, has resulted in, and could in the future result in, investigations or litigation, such as actions under the federal False Claims Act and similar whistleblower statutes under state laws.

In addition, disclosure of an adverse investigation or audit or the imposition of fines or other sanctions could negatively affect our reputation in certain markets and make it more difficult for us to sell our products and services.

A description of material pending legal actions and other legal and regulatory matters is included in Note 22 to the Consolidated Financial Statements included in this Form 10-K. The outcome of litigation and other legal or regulatory matters is always uncertain.

Extensive health care regulation and enforcement, including fraud, waste and abuse laws, could increase our compliance costs, restrict our operations and expose us to significant liability.

Federal and state governments have made investigating and prosecuting health care and other insurance fraud, waste and abuse a priority. Fraud, waste and abuse prohibitions encompass a wide range of activities, including kickbacks for referral of customers, billing for unnecessary medical services, improper marketing and violations of patient privacy rights. Some of our businesses are also subject to federal and state laws and regulations that may impact our relationships with health care providers and customers, including laws on self-referrals, beneficiary inducements, false claims, fee-splitting, telemedicine, corporate practice of medicine, dispensing, packaging, fulfillment and distribution of controlled substances, other pharmaceutical products and medical devices, medical malpractice, consumer protection, product liability, narrow networks, provider tiering programs, provider contracts, overpayments, reimbursement of out-of-network claims, and licensure. The regulations and contractual requirements applicable to us are complex and subject to change and may affect our ability to market or provide our products or services. In addition, ongoing vigorous law enforcement, a highly technical regulatory scheme, and the Dodd-Frank Act and related regulations enhance regulators' enforcement powers and whistleblower incentives and protections. Our compliance efforts in this area will continue to require significant resources, and failure to comply with such regulation could adversely affect our reputation and also expose us to litigation and other proceedings, fines and penalties.

Operational Risks

Our business depends on our ability to effectively invest in, improve and properly maintain the uninterrupted operation, availability and data integrity of our information technology and other business systems.

Our business is highly dependent on maintaining effective information systems, as well as the integrity and timeliness of the data we use to serve our customers and health care providers and to operate our business. If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party providers or subcontractors that we or they engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our clients, customers and health care providers and hinder our ability to provide or establish appropriate pricing for products and services, retain

and attract clients and customers, establish reserves, report financial results accurately and in a timely manner, and maintain regulatory compliance, among other things.

Any failure or disruption of our performance of, or our ability to perform, key business functions, including through unavailability or cyberattack of our information technology systems or those of third parties (including cloud service providers), could cause slower response times, decreased levels of service satisfaction and harm to our reputation. Our systems interface with and depend on third-party systems, and we could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption.

While we have adopted, and continue to enhance, business continuity and disaster recovery plans and strategies, there is no guarantee that such plans and strategies will be effective, which could interrupt the functionality of our information technology systems or those of third parties. Our failure to implement adequate business continuity and disaster recovery strategies could significantly reduce our ability to provide products and services to our customers and clients, which could have material adverse effects on our business and results of operations.

Our information technology strategy and execution are critical to our continued success. We must continue to invest in and maintain long-term solutions that will enable us to anticipate customer needs and expectations, enhance the customer experience, act as a differentiator in the market, and protect against cybersecurity risks and threats or other events that could disrupt our information technology systems. Our success is dependent, in large part, on maintaining the effectiveness of existing technology systems and continuing to deliver and enhance technology systems that support our business processes in a cost- and resource-efficient manner. Increasing regulatory and legislative changes will place additional demands on our infrastructure that could have a direct impact on resources available for other strategic initiatives. In addition, recent trends toward greater consumer engagement in health care require new and enhanced technologies, including applications for mobile devices. Connectivity among technologies is becoming increasingly important. We must also develop new systems to meet current market standards and keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, and customer needs. Failure to do so may present compliance challenges and impede our ability to deliver services in a competitive manner. Further, because system development projects are long-term in nature, they may be more costly than expected to complete and may not deliver the expected benefits upon completion. Our failure to effectively invest in, implement improvements to and properly maintain the uninterrupted operation, availability and data integrity of our systems could adversely affect our results of operations, financial position, cash flow and internal controls over financial reporting.

As a large global health company, we and our vendors are subject to cyberattacks or other privacy or data security incidents. If we are unable to prevent or contain the effects of any such attacks, or fail to ensure vendors do the same, we may suffer exposure to substantial liability, reputational harm, loss of revenue or other damages.

Our business depends on our clients' and customers' willingness to entrust us with their PII, including PHI, that is subject to various privacy and data security laws and regulations, including data breach notification laws. Computer networks or systems may be vulnerable to intrusion, hacking, computer viruses or malware (including ransomware), denial of service attacks, credential stuffing, phishing and other social engineering attacks, supply chain attacks, programming errors, fraud or malice on the part of our employees or vendors, human error, terrorism, and other attacks by third parties or similar disruptive problems. We have been, and will likely continue to be, the target of computer viruses or other malicious codes, unauthorized access, cyberattacks or other computer-related penetrations. There have been, and will continue to be, large-scale cyberattacks within the health services industry. For example, Change Healthcare, a health technology company owned by UnitedHealth Group and a service provider for certain of our pharmacy benefit management services, was the victim of a ransomware attack in February 2024. This resulted in limited disruption of certain of our services and necessitated security validations for certain systems before we reconnected with Change Healthcare to resume such services. Additionally, hardware, software or applications we develop or procure from third parties may contain defects in design, manufacturer defects, software bugs or errors or other problems that could unexpectedly compromise information technology. Human or technological error has resulted in, and could in the future result in, for example, unauthorized access to and acquisition, disclosure, modification, misuse, loss or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated or confidential data, including PII and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions, or denials of service.

As we increase the amount of PII that we store and share digitally, our exposure to unauthorized uses and disclosures and data privacy and related cybersecurity risks increases, including the risk of undetected attacks, damage, loss, or unauthorized access or acquisition or misappropriation of proprietary information or PII. The cost of attempting to protect against these risks also increases. The health care data ecosystem is complex and requires data exchange with vendors, business partners, health care professionals, the government and others. If disruptions, data disclosures, security incidents or breaches are not detected quickly, their effect could be compounded. We have dedicated significant resources to implement privacy and security technologies, processes and procedures to protect PII and

provide employee awareness training around phishing, malware and other cyber risks; however, such measures may not be effective against all types of security incidents.

Cybersecurity threats are rapidly evolving, and those threats and the means for obtaining access to our proprietary systems are becoming increasingly sophisticated. Cyberattacks can originate from a wide variety of sources, including terrorists; nation states; nation-state supported actors; organized criminal groups; “hacktivists;” internal actors; or third parties, such as external service providers. The techniques used change frequently or are often not recognized until after they have been launched. For example, there continues to be an increase in new financial fraud schemes akin to ransomware attacks on large companies, whereby a cybercriminal installs a type of malicious software, or malware, that prevents a user or enterprise from accessing computer files, systems or networks and demands payment of a ransom for their return. Such threats also may see their frequency increased, and effectiveness enhanced, by the use of AI. Those parties may also attempt to fraudulently induce employees, customers or other users of our systems to disclose or inadvertently provide access to systems in order to gain access to our data or that of our customers. In addition, while we have certain standards for all vendors that provide services to us, our vendors and, in turn, their own service providers may become subject to the same types of security breaches. Finally, our offices may be vulnerable to security incidents or security attacks, acts of vandalism or theft, misplaced or lost data, human error or similar events that could negatively affect our systems and our customers' and clients' data.

The costs to eliminate or address security threats and vulnerabilities before or after a cyber incident could be significant. Our remediation efforts may not be successful and could result in interruptions, delays or cessation of service and loss of customers. As security threats continually evolve, we may be required to devote additional resources to modify or enhance our operational or security systems and networks and our cybersecurity program.

In addition, the unauthorized access to and the acquisition, use, disclosure or dissemination of information about us, our customers or other third parties could expose our customers and their private information to the risk of financial or medical identity theft. Unauthorized access to and the acquisition, use, disclosure or dissemination of information about our business and strategy could also negatively affect the achievement of our strategic initiatives. Such events could cause us to breach our contractual obligations and violate applicable laws. Any actual or perceived data security incident could negatively affect our ability to compete, our reputation, our customer base and our revenues and could expose us to mandatory disclosure requirements; government investigations, litigation and other enforcement proceedings; material fines, penalties or remediation costs; compensatory, special, punitive or statutory damages; consent orders; or other adverse actions, any of which could adversely affect our business, results of operations, financial condition or liquidity.

Our use of artificial intelligence and machine learning present regulatory and legal challenges that could negatively affect our business and our reputation .

Our use of AI and ML technologies, as well as more recent technological advances in AI/ML, pose risks to us and subject us to new and existing laws and regulations. The use of generative AI, a relatively new and emerging technology still in the early stages of commercial use, potentially exposes us to additional risks, such as damage to our reputation, competitive position, and business, legal and regulatory risks and additional costs. For example, generative AI has been known to produce false or “hallucinatory” inferences or output. Certain generative AI uses ML and predictive analytics, which can produce inaccurate, incomplete or misleading content; unintended biases and other discriminatory or unexpected results; or errors and inadequacies, any of which may not be easily detectable by us or any of our related service providers. Accordingly, while AI systems may help provide more tailored or personalized user experiences, if the content, analyses or recommendations that AI systems assist in producing on our platform are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected.

While we are committed to responsible use of AI/ML and following applicable laws and regulations, and while we have made progress developing governance as to use of AI/ML by our organization, any failure to use AI/ML responsibly and to adhere to such laws, regulations and governance could have a material unfavorable effect on our business, results of operations and financial condition. Depending on how existing laws and regulations are interpreted, and as new laws go into effect, we may have to make changes to our business practices to comply with such obligations. These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to retrain our AI/ML, require us to comply with outside standards, or cease or limit our use of AI/ML. We may not be able to adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional resources to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions. Moreover, because these technologies are highly complex and rapidly developing, it is not possible to predict all of the legal or regulatory risks that may arise relating to our use of such technologies.

Our use of AI/ML technologies has resulted and could continue to result in additional compliance costs, regulatory investigations and actions, and lawsuits. For example, we are currently subject to litigation claiming that we improperly used AI in the claims evaluation

process. If we are unable to use AI/ML, or if regulators restrict our ability to use AI/ML for certain purposes, it could make our business less efficient, result in competitive disadvantages, and subject us to potentially unfavorable business impacts. To the extent that we rely on or use the output of AI/ML, any inaccuracies, biases or errors could have unfavorable impacts on us, our business, and our results of operations or financial condition. The impact of regulatory and legal risks associated with AI/ML is largely unknown.

We are dependent on the success of our relationships with third parties for various services and functions.

To improve operating costs, productivity and efficiencies, we contract with third parties for the provision of specific services. Our operations may be adversely affected if a third party fails to satisfy its obligations, if the arrangement is terminated in whole or in part, or if there is a contractual dispute between us and the third party. Even though contracts are intended to provide certain protections, we have limited control over the actions of third parties. For example, noncompliance with any privacy or security laws and regulations, any security breach involving one of our third-party vendors, or a dispute between us and a third-party vendor related to our arrangement could have a material adverse effect on our business, results of operations, financial condition, liquidity and reputation.

Outsourcing also may require us to change our existing operations, adopt new processes for managing these service providers, or redistribute responsibilities to realize the potential productivity and operational efficiencies. Delays or difficulties in changing business processes, or the failure of our third-party vendors to perform as expected, may prevent us from realizing the anticipated economic and other benefits of these relationships, whether on a timely basis or at all. This could result in additional costs or regulatory compliance issues or create other operational or financial problems for us. Terminating or transitioning, in whole or in part, arrangements with key vendors could result in additional costs or penalties, risks of operational delays, or potential errors and control issues during the termination or transition phase. We may not be able to find an alternative vendor in a timely manner or on acceptable terms. If there is an interruption in business or loss of access to data resulting from a security breach, termination or transition in services, we may not be able to meet the demands of our customers and, in turn, our business, liquidity and results of operations could be adversely impacted.

A significant disruption in service within our operations or among our key suppliers or other third parties could materially adversely affect our business, liquidity and results of operations.

Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted fashion, necessary business functions, such as claims processing and payment; the operation of internet support and customer call centers, data centers and corporate facilities; the processing of new and renewal business; the maintenance of appropriate shipment and storage conditions for prescriptions (such as temperature and protection from contamination); and home delivery processing. In some instances, our ability to provide services or products (including processing and dispensing prescriptions) depends on the availability of services and products provided by suppliers, providers, pharmaceutical manufacturers, vendors or shipping carriers. A disruption, or threat of disruption, in our supply chain, or an inability to access or deliver products that meet requisite quality safety standards and patient needs in a timely and efficient manner, could adversely impact our business. Increasing natural disasters in connection with climate change could also be a direct threat to us and our third-party vendors, service providers or other stakeholders. Natural disasters have impacted, and may continue to impact, our customers and pose a risk to our employees and facilities located in the affected region. Responses to such scenarios have included and may include, among other things, making temporary policy changes, such as waiving various medical requirements; assisting with replacement medications; transferring prescriptions; and expanding our help line.

We face political, legal, operational, regulatory, economic and other risks in connection with our international operations.

As a global company, our business is increasingly exposed to risks inherent in foreign operations, including challenges arising out from geopolitical conditions, evolving legal and regulatory environment, labor and cultural practices, local civil unrest or political controversy, and foreign currency exchange fluctuations. These factors may increase in significance as we continue to expand globally, and operating in new foreign markets may require considerable management time before operations generate any significant revenues and earnings. Any one of these challenges could negatively affect our operations or long-term growth.

International operations also require us to devote significant resources to implement controls and systems in new markets to comply with, and to ensure that our vendors and partners comply with, U.S. and foreign laws prohibiting bribery, corruption and money laundering, in addition to other regulations regarding, among other things, our products, direct-to-consumer communications, customer privacy, data protection and data residency. Violations of these laws and regulations could result in fines; criminal sanctions against us, our officers or employees, restrictions or outright prohibitions on the conduct of our business; and significant reputational harm. Our success depends, in part, on our ability to anticipate these risks and manage these challenges. Our failure to comply with laws and regulations governing our conduct outside of the United States, or to establish constructive relations with non-U.S. regulators, could have a material adverse effect on our business, results of operations, financial condition, liquidity and long-term growth. Please see "—Legal, Regulatory and Public Policy Risks Arising from our Business" above.

Strategic transactions involve risks, and we may not realize the expected benefits because of integration or separation difficulties, underperformance relative to our expectations, and other challenges, which could lead to an impairment charge.

As part of our strategy, we regularly consider and enter into strategic transactions, including mergers, acquisitions, joint ventures, licensing arrangements, divestitures and other relationships (collectively referred to as "strategic transactions"). The risks we may face with respect to such strategic transactions include:

• significant competition for attractive targets and opportunities, and we may be unable to identify or successfully complete strategic transactions;

• the inability to complete any strategic transactions on terms favorable to us within the expected time frames, or at all;

• divestitures may result in continued financial exposure, including increased costs due to potential litigation, contingent liabilities, and indemnification of the buyer related to, among other things, lawsuits, regulatory matters, or tax liabilities, following the completion of any other such transaction;

• the anticipated benefits from any strategic transactions may not be fully realized or may take longer to realize than expected;

• integration and separation activities may result in additional and unforeseen expenses, including facilities and systems consolidation or separation costs and costs to retain key employees, as well as decreases in expected revenues, earnings or cash flows;

• the carrying value of goodwill or other intangible assets - which, as of December 31, 2025, was approximately $73.5 billion, representing 47% of our total consolidated assets - may be materially and adversely impacted if acquired businesses do not perform as expected, or if future evaluations require impairment charges that could materially affect our results of operations and shareholders' equity in the period in which the impairment occurs;

• the issuance of additional common stock could dilute ownership interests of our shareholders, or the incurrence of additional debt could increase costs and impact our ability to access capital in the future in connection with a strategic transaction;

• the integration of businesses may cause increasing complexity in our systems and internal controls and could cause us to fail to meet our financial reporting obligations; and

• announcements related to an acquisition could have an adverse effect on the market price of our common stock and other securities.

Further, joint ventures and equity investments present risks that are different from acquisitions, including risks related to specific operations and finances of the businesses we invest in; selection of appropriate parties; differing objectives of the various parties; competition between and among parties; compliance activities (including compliance with applicable CMS requirements); growing of the business in a manner acceptable to all parties; the maintenance of positive relationships among the parties, clients and customers; and initial and ongoing governance of joint ventures and customer and business disruption that may occur upon a joint venture termination. For example, in the year ended December 31, 2024, we determined our investment in VillageMD was fully impaired and recorded a $2.7 billion loss in Net investment gains/losses in our Consolidated Statements of Income.

See Note 19 to the Consolidated Financial Statements for more information on goodwill and intangibles.

Future performance of our business will depend on our ability to execute our strategic and operational initiatives effectively.

The future performance of our business depends on our ability to effectively implement and execute our strategic and operational initiatives. Strategic execution risk may be heightened by the complexity across our pharmacy services and health care businesses. In particular, our strategic and operational performance depends on our ability to:

• grow and support our product portfolio, expand our addressable markets, develop and effectively implement products and services to improve the accessibility, affordability and transparency of healthcare, and identify and introduce the proper mix, coordination or integration of products that the marketplace will accept;

• evaluate drugs for efficacy, value and price to assist clients in selecting a cost-effective formulary;

• offer cost-effective home delivery pharmacy and specialty services;

• access or continue accessing key drugs and successfully penetrate key treatment categories in our specialty pharmacy business;

• deliver discounts to health benefit providers;

• transition health care providers from volume-based, fee-for-service arrangements to a value-based system;

• improve medical cost competitiveness in our targeted markets;

• manage our medical, pharmacy, administrative and other operating costs effectively;

• contract with health care providers, pharmacy providers and pharmaceutical manufacturers on market competitive terms; and

• develop and create responsible data and analytic solutions to support and improve outcomes for our products, services and solutions, including creating and developing solutions and services through partnerships with other industry participants.

We will be unable to rapidly respond to competitive, economic and regulatory changes if we do not make important strategic and operational decisions quickly; define our appetite for risk; implement new governance, managerial and organizational processes smoothly; and communicate roles and responsibilities clearly. If our strategic and operational initiatives fail or are not executed effectively, our business may be unable to grow as planned, and our consolidated financial position and results of operations could be negatively affected.

Financial Risks

Economic and market conditions affect the value of our financial instruments and the value of particular assets and liabilities, investment income, and interest expense.

As an insurer, we have substantial investment assets that support insurance and contractholder deposit liabilities and surplus requirements in our regulated companies. The market values of our investments vary depending on economic and market conditions with no offsetting change in the value of a portion of our liabilities. A substantial portion of our investment assets are in fixed interest-yielding debt securities of varying maturities and commercial mortgage loans. The value of these investment assets can fluctuate significantly with changes in market conditions. In addition, an economic contraction could result in delay in payment of principal or interest by issuers, or defaults by issuers, reducing our investment income and requiring us to write down the value of our investments.

Significant stock market or interest rate declines could result in unfunded pension obligations, resulting in the need for additional plan funding by us and increased pension expenses.

We currently have overfunded obligations in our frozen pension plan. A significant decline in the value of the plan's equity and fixed income investments, or unfavorable changes in applicable laws or regulations, could materially increase our expenses and change the timing and amount of required plan funding. This could reduce the cash available to us, including our subsidiaries. We are also exposed to interest rate and equity risk associated with our pension obligations. Sustained declines in interest rates could have an adverse impact on the funded status of our pension plans and our reinvestment yield on new investments. See Note 17 to the Consolidated Financial Statements for more information on our obligations under the pension plans.

A downgrade in the financial strength ratings of our insurance subsidiaries could adversely affect new sales and retention of current business, and a downgrade in our debt ratings would increase the cost of borrowed funds and could negatively affect our ability to access capital.

Financial strength, claims-paying ability and debt ratings by recognized rating organizations are each important factors in establishing the competitive position of insurance and health benefits companies. Ratings information by nationally recognized rating agencies is broadly disseminated and generally used throughout the industry. We believe that the claims-paying ability and financial strength ratings of our principal insurance subsidiaries are important factors in marketing our products to certain customers. Our debt ratings impact both the cost and availability of future borrowings and, accordingly, our cost of capital. Each of the rating agencies reviews ratings periodically, and current ratings may not be maintained in the future. A downgrade of any of these ratings could make it more difficult to either market our products successfully or raise capital to support business growth.

We maintain significant indebtedness in the ordinary course of business and may incur further indebtedness in the future. Our indebtedness could adversely affect our financial condition and our ability to react to economic or industry changes, and could divert our cash flow from operations for debt service costs, leaving us with less cash flow from operations available to fund growth, stock repurchases, dividends and other corporate purposes.

The total indebtedness of The Cigna Group was approximately $31.5 billion as of December 31, 2025. Carrying indebtedness:

• requires us to dedicate a portion of our cash flow from operations to debt payments, thereby reducing the availability of cash flow to fund our operations and growth strategy;

• increases our vulnerability to general adverse economic and industry conditions, which may require us to dedicate an even greater percentage of our cash to the payment of principal and interest on our debt and limit our access to capital markets;

• exposes us to increases in interest rates to the extent that increased interest expense is not offset by increased income from our investment assets; and

• limits our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry.

The covenants in our debt instruments may have the effect of restricting our financial and operating flexibility to respond to significant changes in business and economic conditions, among other things. We may incur or assume significantly more debt in the future, which may subject us to additional restrictive covenants and increase the risks described above. If our cash flow and capital resources

are insufficient to service our debt obligations, we may be forced to seek additional dividends from our subsidiaries, sell assets, seek additional equity or debt capital, or restructure our debt.

Unfavorable developments in economic conditions may adversely affect our business, results of operations and financial condition.

Many factors, including geopolitical issues, future economic downturns, man-made disasters, natural disasters (including those as a result of climate change) and pandemics, availability and cost of credit, and other capital and consumer spending, can negatively impact the U.S. and global economies. Our results of operations could be materially adversely affected by the impact of unfavorable economic conditions on our clients and customers (both employers and individuals), health care providers, pharmacy manufacturers, pharmacy providers, and third-party vendors. For example:

• Employers may take action to reduce their operating costs by modifying, delaying or canceling plans to purchase our products, or making changes in the mix of products purchased that are unfavorable to us.

• Higher unemployment rates, employee attrition (including challenges filling open positions in light of a competitive job market) and workforce reductions could result in lower enrollment in our employer-based plans (including an increase in the number of employees who opt out of employer-based plans) or our individual plans.

• Significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase costs.

• Because of unfavorable economic conditions or legislation and regulation affecting employer-sponsored coverage, employers may stop offering health care coverage to employees or elect to offer this coverage on a voluntary, employee-funded basis as a means to reduce their operating costs.

• If clients are not successful in generating sufficient funds or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us.

• Our clients or potential clients may force us to compete more vigorously on factors such as price and service to retain or obtain their business.

• Our clients may be acquired, consolidated, or otherwise fail to successfully maintain or grow their business or workforce, which could reduce the number of customers we serve or otherwise result in lower than anticipated utilization of our services.

• A prolonged unfavorable economic environment could adversely impact the financial position of hospitals and other health care providers, potentially increasing our medical costs.

• Our third-party vendors could significantly and quickly increase their prices or reduce their output to reduce their operating costs (our business depends on our ability to perform necessary business functions in an efficient and uninterrupted fashion).

• Other insurers' financial condition may be weakened, increasing the risk that we will receive significant assessments for obligations of insolvent insurers pursuant to guaranty associations, indemnity funds, or other similar laws and regulations.

The occurrence of these events have led, and may lead, to a decrease in our customer base, revenues or margins or an increase in our operating costs.

In addition, during and following a prolonged unfavorable economic environment, federal and state budgets could be materially adversely affected, resulting in reduced or delayed reimbursements or payments in government programs, such as Medicare and Social Security or under contracts with government entities. These budgetary pressures also could cause the government to impose new or higher taxes or assessments on us, such as premium taxes on insurance companies and HMOs and surcharges or fees on select fee-for-service and capitated medical claims. Although we could attempt to mitigate or cover our exposure from such increased costs through, among other things, increases in premiums, we may be unable to mitigate or cover all such costs, which may have a material adverse effect on our business, results of operations, financial condition and liquidity.

We are subject to the credit risk of our reinsurers.

We enter into reinsurance arrangements with other insurance companies, primarily in connection with acquisition or divestiture transactions when the underwriting company is not being acquired or sold. Under all reinsurance arrangements, reinsurers assume insured losses, subject to certain limitations or exceptions that may include a loss limit. These arrangements also subject us to various obligations, representations and warranties with the reinsurers. Reinsurance does not relieve us of liability as the originating insurer. We remain liable to the underlying policyholders if a reinsurer defaults on obligations under the reinsurance arrangement. Although we regularly evaluate the financial condition of reinsurers to minimize exposure to significant losses from reinsurer insolvencies, reinsurers may become financially unsound. If a reinsurer fails to meet its obligations under the reinsurance contract or if the liabilities exceed any applicable loss limit, we will be forced to cover the claims on the reinsured policies.

The collectability of amounts due from reinsurers is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract; whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract; and the magnitude and type of collateral

supporting our reinsurance recoverable, such as holding sufficient qualifying assets in trusts or letters of credit issued. Although a portion of our reinsurance exposures are secured, the inability to collect a material recovery from a reinsurer could have a material adverse effect on our results of operations, financial condition and liquidity.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating the financial condition of The Cigna Group as of December 31, 2025 compared with December 31, 2024 and our results of operations for 2025 compared with 2024 and 2023 and is intended to help you understand the ongoing trends in our business. For comparisons of our results of operations for 2024 compared with 2023, please refer to the previously filed MD&A included in Part II, Item 7 of our Form 10-K for the year ended December 31, 2024. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K ("Form 10-K") and the "Risk Factors" contained in Part I, Item 1A of this Form 10-K.

Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in this Form 10-K for additional information regarding the Company's significant accounting policies. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").

In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.

The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.

The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future

underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, total revenues. See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.

See Note 23 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 23 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate. Ratios presented in the segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.

EXECUTIVE OVERVIEW

The Cigna Group, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company committed to creating a better future for every individual and every community. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. For further information on our business and strategy, see Part I, Item 1 - "Business" of this Form 10-K.

Financial Highlights

Consolidated Results of Operations (GAAP basis)

For the Years Ended December 31,

Change

Change

(Dollars in millions)

Pharmacy revenues

Premiums

Fees and other revenues

Net investment income

Total revenues

Pharmacy and other service costs

Medical costs and other benefit expenses

Selling, general and administrative expenses

Amortization of acquired intangible assets

Total benefits and expenses

Income from operations

Interest expense and other

Net gain (loss) on sale of businesses

Net investment losses

Income before income taxes

Total income taxes

Net income

Less: Net income attributable to noncontrolling interests

Shareholders' net income

Consolidated effective tax rate

bps

bps

Medical customers (in thousands)

Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations

For the Years Ended December 31,

(In millions)

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Shareholders' net income

Adjustments to reconcile to adjusted income from operations

Net investment (gains) losses (1)

Amortization of acquired intangible assets

Special items

Strategic optimization program

Deferred tax expenses (benefits), net

Integration and transaction-related costs

(Benefits) charges associated with litigation matters

Net (gain) loss on sale of businesses

Impairment of dividend receivable

Charge for organizational efficiency plan

Total special items

Adjusted income from operations

(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.

Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations

For the Years Ended December 31,

(Diluted earnings per share)

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Shareholders' net income

Adjustments to reconcile to adjusted income from operations

Net investment (gains) losses (1)

Amortization of acquired intangible assets

Special items

Strategic optimization program

Deferred tax expenses (benefits), net

Integration and transaction-related costs

(Benefits) charges associated with litigation matters

Net (gain) loss on sale of businesses

Impairment of dividend receivable

Charge for organizational efficiency plan

Total special items

Adjusted income from operations

(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.

Financial highlights by segment

For the Years Ended December 31,

Change

Change

(Dollars in millions, except per share amounts)

Revenues

Adjusted revenues by segment

Evernorth Health Services

Cigna Healthcare

Other Operations

Corporate, net of eliminations

Adjusted revenues

Net investment results from certain equity method investments

Special item related to impairment of dividend receivable

Total revenues

Shareholders' net income

Adjusted income from operations

Earnings per share (diluted)

Shareholders' net income

Adjusted income from operations

Pre-tax adjusted income (loss) from operations by segment

Evernorth Health Services

Cigna Healthcare

Other Operations

Corporate, net of eliminations

Consolidated pre-tax adjusted income from operations

Income attributable to noncontrolling interests

Net investment gains (losses) (1)

Amortization of acquired intangible assets

Special items

Income before income taxes

(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.

Key Transactions and Business Developments

Divestiture of Medicare Advantage and Related Businesses

On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies ® businesses to Health Care Service Corporation ("HCSC," and such transaction, the "HCSC transaction"). The final purchase price and total cash proceeds collected in 2025 were $4.9 billion. See Note 5 to the Consolidated Financial Statements for further information.

Strategic Optimization Program

In the first quarter of 2025, the Company commenced an enterprise-wide initiative to evolve our business and deliver a more efficient and improved experience for our patients, providers and customers. In 2025, we reported total costs of $749 million, pre-tax ($565 million, after-tax) associated with this initiative. As we continue to evaluate additional opportunities to improve the overall efficiency and effectiveness of our operations, we anticipate future charges. See Note 16 to the Consolidated Financial Statements for further information.

We expect this initiative to generate annualized after-tax savings of at least $500 million, a portion of which was realized in 2025.

Commentary: 2025 versus 2024

The commentary presented below, and the segment commentaries that follow, compare results for the year ended December 31, 2025 with results for the year ended December 31, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Shareholders' net income increased 73%, primarily reflecting the absence of the impairment of VillageMD equity securities that was recorded in 2024.

Adjusted income from operations. See discussion of segment results in the "Segment Reporting" section.

Medical customers decreased 5%, primarily reflecting the closing of the HCSC transaction.

Pharmacy revenues increased 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Premiums decreased 12%, primarily driven by the impact of the HCSC transaction (-18%), partially offset by higher premium rates within our ongoing U.S. Healthcare businesses (+4%).

Fees and other revenues increased 14%, primarily reflecting growth in affordability services (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.

Net investment income increased 8%, primarily due to an increase in partnership income (17%) as well as the absence of the impairment of the dividend receivable in 2024 related to VillageMD accrued dividends (19%). These impacts were offset by lower average assets (23%), due in part to the impact of the HCSC transaction.

Pharmacy and other service costs increased 18%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Medical costs and other benefit expenses decreased 11%, primarily driven by the impact of the HCSC transaction (-18%), partially offset by higher medical costs within our ongoing U.S. Healthcare businesses (+7%).

Selling, general and administrative ("SG&A") expenses decreased 2%, primarily impacted by the HCSC transaction (-10%), partially offset by supporting business growth (+5%) and the strategic optimization program (+3%). See Note 16 to the Consolidated Financial Statements for further discussion of the strategic optimization program.

Net gain (loss) on sale of businesses decreased in 2025 . The gain recorded in 2025 primarily reflects the HCSC transaction. The net gain reported in 2024 reflects the sale of a portion of an equity method investment, partially offset by an estimated loss on sale (primarily goodwill impairments) related to the HCSC transaction. See the "Divestiture of Medicare Advantage and Related Businesses" section above and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.

Investment results improved in 2025, primarily reflecting the absence of the impairment of VillageMD equity securities that was recorded in 2024.

The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-1100 bps) and benefits related to the HCSC transaction (-400 bps), partially offset by an increased valuation allowance against foreign tax attributes (+500 bps). See Note 21 to the Consolidated Financial Statements for further discussion of these matters.

S EGMENT REPORTING

Evernorth Health Services Segment

Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives. As described in the introduction to Segment Reporting, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

The Company has renewed or extended contracts with the business’s three largest clients through the end of the decade. Additionally, to further deliver value for the benefit of those we serve and to build a more sustainable model for health care, the Company will incur investment and transition costs to support its recently announced rebate-free model for pharmacy benefits, designed to lower

medication costs, improve transparency and support local pharmacies. As a result, we expect these efforts to impact pre-tax adjusted income from operations for Evernorth Health Services over the short term.

Key Factors Affecting Segment Performance

The key factors that impact the segment's revenues and income from operations are claims utilization, claims composition and contract affordability services. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements in this Form 10-K for additional information on revenue and cost recognition policies for this segment.

Key factors that impact both Pharmacy Benefit Services and Specialty and Care Services:

• Pharmacy claim volume (also referred to as utilization) relates to processing prescription claims filled by retail pharmacies in our network and dispensing prescription claims from our home delivery and specialty pharmacies, along with other claims. Pharmacy claim volume is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.

• The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices, and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.

• Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and manufacturer rebates (also referred to as affordability improvements or affordability services). Through these affordability improvements, we seek to improve the effectiveness of our combined and standalone solutions for our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.

Key factors that impact Specialty and Care Services:

• Customer and client growth, both organic and new business, and key relationships in our Specialty and Care Services business generally results in increased revenues and income from operations. This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, benefits management and behavioral health services as we expand our businesses.

Results of Operations

Financial Summary

For the Years Ended December 31,

Change

Change

(Dollars in millions)

Adjusted revenues (1)

Pre-tax adjusted income from operations (1)

Pre-tax margin (1)(2)

bps

bps

SG&A expense ratio (3)

bps

bps

(1) See Note 23 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.

(2) Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.

(3) SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 23 to the Consolidated Financial Statements for further details.

In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.

Selected Financial Information

For the Years Ended December 31,

Change

Change

(Dollars and adjusted scripts in millions)

Total adjusted revenues

Pharmacy Benefit Services

Specialty and Care Services

Total adjusted revenues

Pre-tax adjusted income from operations

Pharmacy Benefit Services

Specialty and Care Services

Total pre-tax adjusted income from operations

Pharmacy claim volume (1)

(1) Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims. All other network and specialty prescriptions are counted as one claim.

2025 versus 2024

Commentary in parentheses regarding percentage changes (or bps) represents the driver's impact on the overall category.

Adjusted revenues increased 16%, primarily reflecting higher utilization of prescription drugs from customer growth in Pharmacy Benefit Services (+6%) and Specialty and Care Services (+6%) and an increase due to claims composition in Pharmacy Benefit Services (+4%).

Pre-tax adjusted income from operations increased 3%, primarily reflecting specialty pharmacy growth in Specialty and Care Services (+6%), and contract affordability improvements and customer growth in Pharmacy Benefit Services (+1%), partially offset by strategic investments and initiatives to support business growth and improve the patient experience in Pharmacy Benefit Services (-3%) and Specialty and Care Services (-1%).

The SG&A expense ratio decreased 10 bps, primarily reflecting higher adjusted revenues as discussed above, offset by strategic investments and initiatives to support business growth.

Cigna Healthcare Segment

Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.

On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment. See "Key Transactions and Business Developments" for further discussion.

Key Factors Affecting Segment Performance

The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in this Form 10-K for additional information on revenue and cost recognition policies for this segment.

• Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services.

• Higher medical costs (also referred to as higher medical cost trend) are impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services.

• MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates. Affordability initiatives that serve to mitigate medical cost inflation also impact the MCR.

• The SG&A expense ratio represents the segment's selling, general and administrative expenses divided by adjusted revenues.

Results of Operations

Financial Summary

For the Years Ended December 31,

Change

Change

(Dollars in millions)

Adjusted revenues (1)

Pre-tax adjusted income from operations (1)

Pre-tax margin (1)(2)

bps

bps

Medical care ratio

bps

bps

SG&A expense ratio (3)

bps

bps

(1) See Note 23 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.

(2) Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.

(3) SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 23 to the Consolidated Financial Statements for further details.

2025 versus 2024

Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Adjusted revenues decreased 11%, or $5,751 million, primarily due to the impact of the HCSC transaction (-$8,498 million), partially offset by higher premiums within employer insured (+$1,276 million) and stop loss (+$855 million), primarily reflecting premium rate increases.

Pre-tax adjusted income from operations decreased 2%, or $76 million, primarily due to lower contributions from the Individual and Family Plans business.

The medical care ratio increased 120 bps, primarily due to higher medical costs, driven by the Individual and Family Plans business.

The SG&A expense ratio decreased 20 bps, primarily due to revenue growth outpacing volume-related expenses within the ongoing businesses (-70 bps), partially offset by higher technology spend (+30 bps) and the impact of the HCSC transaction (+20 bps).

Medical Customers

Medical customers include individuals who meet any of the following criteria: (i) are covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by Cigna Healthcare; (ii) have access to the Cigna Healthcare provider network for covered services under their medical plan; or (iii) have medical claims that are administered by Cigna Healthcare.

Cigna Healthcare Medical Customers

As of December 31,

Change

Change

(In thousands)

U.S. Healthcare

International Health (1)

Insured

U.S. Healthcare

International Health (1)

Administrative services only

Total

(1) International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.

Total medical customers decreased 5%, primarily due to the HCSC transaction.

Unpaid Claims and Claim Expenses

As of December 31,

Change

Change

(In millions)

Unpaid claims and claim expenses

Our unpaid claims and claim expenses liability decreased 15%, primarily due to the HCSC transaction.

Other Operations

Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

Results of Operations

Financial Summary

For the Years Ended December 31,

Change

Change

(Dollars in millions)

Adjusted revenues

Pre-tax adjusted income (loss) from operations

Pre-tax margin

bps

bps

2025 versus 2024

Adjusted revenues primarily reflect premiums and net investment income associated with COLI and our run-off operations, as well as revenues from other non-strategic businesses.

Pre-tax adjusted income (loss) from operations increased, primarily driven by the decision to discontinue certain small non-strategic businesses.

Corporate

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs, and eliminations for products and services sold between segments.

Financial Summary

For the Years Ended December 31,

Change

Change

(In millions)

Pre-tax adjusted loss from operations

2025 versus 2024

Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Pre-tax adjusted loss from operations decreased, primarily due to lower interest expense (-3%) and lower operating costs (-2%).

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels: the subsidiary level and the parent company level.

Subsidiary Level. Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments; expense requirements, primarily for employee compensation and benefits, information technology, and facilities costs; income taxes; and debt service.

Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits.

Parent Company Level. Cash requirements at the parent company level generally consist of debt service, payment of declared dividends to shareholders, lending to subsidiaries as needed and pension plan funding.

The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments, collecting dividends from its subsidiaries, using proceeds from issuing debt and common stock, and borrowing from its subsidiaries, subject to applicable regulatory limits.

Regulatory Restrictions. Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 20 to the Consolidated Financial Statements in this Form 10-K for additional information regarding these restrictions. Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.

Investment Portfolio. We support the liquidity needs of our businesses by managing the duration of invested assets to be consistent with the duration of liabilities. We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.

Cash flows for the years ended December 31 were as follows:

For the Years Ended December 31,

(In millions)

Operating activities

Investing activities

Financing activities

The following discussion explains variances in the various categories of cash flows for the year ended December 31, 2025 compared with the same period in 2024.

Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums and medical costs, fees, investment income, taxes, and other expenses.

Operating cash flows decreased for the year ended December 31, 2025, primarily due to the unfavorable net impact related to clients that onboarded in 2024, as well as timing of settlements related to the accounts receivable factoring facility. These decreases are partially offset by the favorable impact of accrued liabilities and higher insurance liabilities.

Investing Activities. The increase in cash used in investing activities reflects higher investment purchases, partially offset by the net proceeds from the HCSC transaction.

Financing Activities. The decrease in net cash used in financing activities in 2025 is primarily driven by lower share repurchases, partially offset by higher debt repayments.

Capital Resources

Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.9 billion for the year ended December 31, 2025 and $2.4 billion for the year ended December 31, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.

We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary; (ii) pay dividends to shareholders; (iii) consider acquisitions

and investments that are strategically and economically advantageous; and (iv) return capital to shareholders through share repurchases.

Funds Available

Commercial Paper Program . There was no commercial paper outstanding balance as of December 31, 2025.

Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.

As of December 31, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $7.9 billion in cash and short-term investments, approximately $0.9 billion of which was held by the parent company or certain non-regulated subsidiaries.

Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.0% and 43.8% as of December 31, 2025 and 2024, respectively.

We actively monitor our debt obligations and engage in issuance and repayment activities as needed in accordance with our capital management strategy.

Debt Issuance and Term Loan. In September 2025, we issued $4.5 billion of new senior notes. The proceeds from this debt issuance were used to repay the $2.0 billion of loans outstanding under the Term Loan Facility, dated August 2025, the proceeds of which were used to partially fund an investment in Shields Health Solutions, a leading specialty pharmacy management company. We used the remainder for general corporate purposes, including investments and repayment of indebtedness. See Note 7 to the Consolidated Financial Statements for further information regarding our debt issuance and the Term Loan Facility.

Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.2 billion from its subsidiaries without further approvals as of December 31, 2025.

Use of Capital Resources

Short-Term and Long-Term Debt. See Note 7 to the Consolidated Financial Statements for further information regarding changes to our short-term and long-term debt. The Company may, from time to time, repay or repurchase debt in advance of maturities when it deems appropriate.

Capital Expenditures . Capital expenditures for property, equipment and computer software were $1.2 billion in the year ended December 31, 2025 compared with $1.4 billion in the year ended December 31, 2024. We expect to deploy approximately $1.3 billion in capital expenditures in 2026, which will be funded primarily from operating cash flows.

Dividends . The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by our Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information regarding dividend payments and declarations.

Share Repurchases . The Company maintains a share repurchase program authorized by the Board of Directors, under which it may repurchase shares of its common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time.

We repurchased 11.9 million shares for approximately $3.6 billion during the year ended December 31, 2025, compared with 20.9 million shares for approximately $7.0 billion during the year ended December 31, 2024.

Other Sources of Funds and Uses of Capital Resources

Divestiture. As discussed in the "Key Transactions and Business Developments" section above, the HCSC transaction was completed on March 19, 2025. We used the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.

Risks to Liquidity and Capital Resources

Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in this Form 10-K.

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 22 to the Consolidated Financial Statements for discussion of various guarantees.

On Balance Sheet :

Long-Term Debt. Total scheduled payments on long-term debt are $49.9 billion through January 2056 (of which $2.0 billion relate to the fiscal year ending December 31, 2026), which include scheduled interest payments and maturities of long-term debt. See Note 7 to the Consolidated Financial Statements for information regarding principal maturities of long-term debt.

Other Non-Current Liabilities. These include other long-term liabilities reflected in our Consolidated Balance Sheets as of December 31, 2025, including obligations associated with other postretirement and postemployment benefit obligations, reinsurance liabilities, supplemental and deferred compensation plans, and derivative financial instruments.

Uncertain Tax Positions. In the event we are unable to sustain all of our $1.5 billion of uncertain tax positions, it could result in future tax payments of approximately $1.2 billion. We are adequately reserved for such positions. As a result, there is minimal direct risk to earnings should we fail to sustain our positions. We cannot reasonably estimate the timing of such future payments. See Note 21 to the Consolidated Financial Statements for additional information on uncertain tax positions.

Off-Balance Sheet :

Purchase Obligations. These include agreements to purchase goods or services that are enforceable and legally binding. Purchase obligations exclude contracts that are cancellable without penalty and those that do not contractually require minimum levels of goods or services to be purchased. As of December 31, 2025, purchase obligations consisted of a total of $6.3 billion of estimated payments required under contractual arrangements (of which we expect $2.1 billion of purchase obligations to be paid within the next 12 months beginning January 1, 2026). This includes the following:

• $3.2 billion of investment commitments (of which we expect $1.0 billion of the committed amounts to be disbursed in 2026). See Note 11 of the Consolidated Financial Statements for additional information on investment commitments.

• $3.1 billion of future service commitments (of which we expect $1.1 billion of the committed amounts to be disbursed in 2026), primarily comprised of contracts for information technology maintenance and support and certain outsourced business processes.

CRITICAL ACCOUNTING ESTIMATES

The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements. Management considers an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made; and

• changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.

Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented in this Form 10-K. We regularly evaluate items that may impact critical accounting estimates.

In addition to the estimates described below, the Notes to the Consolidated Financial Statements describe other estimates that management has made in preparation of the financial statements. Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate. However, if actual experience significantly differs from the assumptions used in estimating amounts reflected in our Consolidated Financial Statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on liquidity and our financial condition. The information below presents the adverse impacts of certain possible changes in assumptions. The effect of assumption changes in the opposite direction would be a positive impact to our consolidated results of operations, liquidity or financial condition, except for assessing impairment of goodwill.

Goodwill and Other Intangible Assets

Nature of Critical Accounting Estimate. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets at the acquisition date. Intangible assets primarily reflect the value of customer relationships and other intangibles acquired in business combinations.

Fair values of reporting units are estimated based on discounted cash flow analysis and market approach models using assumptions that we believe a hypothetical market participant would use to determine a current transaction price. The significant assumptions and estimates used in determining fair value primarily include the discount rate and future cash flows. A discount rate is selected to correspond with each reporting unit's weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within each reporting unit. Projections of future cash flows differ by reporting unit and are consistent with our ongoing strategic projections. Future cash flows for the Evernorth Health Services reporting units are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates. Future cash flows for our other reporting units are primarily driven by forecasted revenues, benefit expenses, operating expenses and long-term growth rates.

The fair value of intangibles and the amortization method were determined using an income approach that relies on projected future cash flows, including key assumptions for customer attrition and discount rates. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value.

The Company conducts its quantitative evaluation for goodwill impairment at least annually during the third quarter at the reporting unit level and performs qualitative impairment assessments on a quarterly basis to determine if events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value.

Goodwill and Other intangible assets as of December 31, 2025 were $44,924 million and $28,560 million, respectively, and as of December 31, 2024, were $44,370 million and $29,417 million, respectively, excluding amounts classified as held for sale. See Note 19 to the Consolidated Financial Statements for additional discussion of our goodwill and other intangibles.

Effect if Different Assumptions Used. We completed our normal annual evaluations for impairment of goodwill and intangible assets during the third quarter of 2025. The evaluations support that as of December 31, 2025, the fair value estimates of our reporting units exceed their carrying values by substantial margins. Changes in assumptions concerning future financial results or other underlying assumptions, including macroeconomic factors, government legislation, changes in the competitive landscape or other market conditions (including business models), could impact our ability to achieve profitability projections. If we consistently do not achieve our earnings and cash flow projections or our cost of capital rises significantly, the assumptions and estimates underlying the goodwill and intangible asset impairment evaluations could be adversely affected and result in future impairment charges that would negatively impact our operating results and financial position.

Income Taxes - Uncertain Tax Positions

Nature of Critical Accounting Estimate. We evaluate tax positions to determine whether the benefits are more likely than not to be sustained on audit based on their technical merits. The Company establishes a liability if the probability that the position will be sustained is 50% or less. For uncertain positions that management believes are more likely than not to be sustained, the Company recognizes a liability based upon management's estimate of the most likely settlement outcome with the taxing authority. These amounts primarily relate to federal and state uncertain positions of the value and timing of deductions and uncertain positions of attributing taxable income to states.

Balances that are included in the Consolidated Balance Sheets within Accrued expenses and other liabilities were $1,538 million and $1,477 million as of December 31, 2025 and 2024, respectively. See Note 21 to the Consolidated Financial Statements for additional discussion around uncertain tax positions and the Liquidity and Capital Resources section of this MD&A for a discussion of their potential impact on liquidity.

Effect if Different Assumptions Used. The factors that could impact our estimates of uncertain tax positions include the likelihood of

sustaining our tax position (and related assumed interest and penalties) under audit. If our positions are upheld upon audit, our net income would increase.

Income Taxes - Valuation Allowance

Nature of Critical Accounting Estimate. Deferred income taxes in the Consolidated Balance Sheets reflect differences between the financial and income tax reporting bases of the Company's underlying assets and liabilities, and are established based upon enacted tax rates and laws. Deferred income tax assets are recognized when available evidence indicates that realization is more likely than not and a valuation allowance is established to the extent this standard is not met. It is possible that the realization of deferred tax assets may be impacted by changes in forecasted future earnings in various foreign jurisdictions or the Company's ability to generate future capital gains.

Valuation allowances that are included in the Consolidated Balance Sheets within Deferred tax liabilities, net were $2,374 million and $2,332 million as of December 31, 2025 and 2024, respectively. See Note 21 to the Consolidated Financial Statements for additional discussion around valuation allowances.

Effect if Different Assumptions Used. The factors that could impact our estimates of valuation allowances include changes in forecasted future earnings in foreign jurisdictions, potential international tax reform, and the Company's future ability to generate capital gains. Decreases in our valuation allowance would increase net income, while increases in our valuation allowance would decrease net income.

Unpaid Claims and Claims Expenses - Cigna Healthcare

Nature of Critical Accounting Estimate. Unpaid claims and claim expenses reflect estimates of the ultimate cost of claims that have been incurred but not reported, expected development on reported claims, claims that have been reported but not yet paid (reported claims in process) and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities.

Unpaid claims and claim expenses in Cigna Healthcare are primarily impacted by assumptions related to completion factors and medical cost trend. Variation of actual results from either assumption could impact the unpaid claims balance as noted below. A large number of factors may cause the medical cost trend to vary from the Company's estimates, including changes in health management practices, changes in the level and mix of benefits offered and services utilized, and changes in medical practices. Completion factors may be affected if actual claims submission rates from providers differ from estimates (that can be influenced by a number of factors, including provider mix and electronic versus manual submissions), or if changes to the Company's internal claims processing patterns occur.

Unpaid claims and claim expenses for the Cigna Healthcare segment, both gross and net of reinsurance and other recoverables, as of December 31, 2025 were $4,241 million gross and $4,094 million net and as of December 31, 2024 were $5,018 million gross and $4,859 million net. See Note 9 to the Consolidated Financial Statements for additional information regarding assumptions and methods used to estimate this liability.

Effect if Different Assumptions Used. Based on studies of our claim experience, it is reasonably possible that a 100 basis point change in the medical cost trend and a 50 basis point change in completion factors could occur in the near term. A 100 basis point increase in the medical cost trend rate would increase this liability by approximately $115 million, resulting in a decrease in net income of approximately $90 million after-tax, and a 50 basis point decrease in completion factors would increase this liability by approximately $180 million, resulting in a decrease in net income of approximately $140 million after-tax.

Valuation of Debt Security Investments

Nature of Critical Accounting Estimate. Most debt securities are classified as available for sale and are carried at fair value with changes in fair value recorded in Accumulated other comprehensive loss within Shareholders' equity. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date.

Determining fair value for a financial instrument requires management judgment. The degree of judgment involved generally correlates to the level of pricing readily observable in the markets. Financial instruments with quoted prices in active markets or with market-observable inputs to determine fair value, such as public securities, generally require less judgment. Conversely, private placements including more complex securities that are traded infrequently are typically measured using pricing models that require more judgment as to the inputs and assumptions used to estimate fair value. There may be a number of alternative inputs to select based on an understanding of the issuer, the structure of the security and overall market conditions. In addition, these factors are inherently variable in nature as they change frequently in response to market conditions. Approximately 60% of our debt securities are public securities and approximately 40% are private placement securities.

Typically, the most significant input in the measurement of fair value is the market interest rate used to discount the estimated future cash flows of the instrument. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.

Balances that are included in the Consolidated Balance Sheets within Investments and Long-term investments were $8,362 million and $9,423 million as of December 31, 2025 and 2024, respectively (inclusive of amounts held for sale as of December 31, 2024). See Notes 11A and 12 to the Consolidated Financial Statements for a discussion of our fair value measurements, the procedures performed by management to determine that the amounts represent appropriate estimates and our accounting policy regarding unrealized appreciation on debt securities.

Effect if Different Assumptions Used. If the derived market rates used to calculate fair value increased by 100 basis points, the fair value of the total debt security portfolio of $8.4 billion would decrease by approximately $0.4 billion, resulting in an after-tax decrease to shareholders' equity of approximately $0.3 billion as of December 31, 2025.

INVESTMENT ASSETS

Information regarding our investment assets is included in Notes 11, 12, 13 and 15 to the Consolidated Financial Statements.

Investment Outlook

Future realized and unrealized investment results will be driven largely by market conditions, and these future conditions are not reasonably predictable. We believe that the vast majority of our investments will continue to perform under their contractual terms. We manage the portfolio for long-term economics; therefore, we expect to hold a significant portion of these assets for the long term. Although future declines in investment fair values remain possible due to interest rate movements and credit deterioration due to both investment-specific uncertainties and global economic uncertainties as discussed below, we do not expect these losses to have a material unfavorable effect on our financial condition or liquidity. The below discussion addresses the strategies and risks associated with our various classes of investment assets. See Part I, Item 1A - "Risk Factors" of this Form 10-K for additional information regarding risks associated with our investment portfolio.

Debt Securities

The carrying value of our debt securities portfolio decreased from $9.4 billion as of December 31, 2024 to $8.4 billion as of December 31, 2025, primarily reflecting the HCSC transaction . See Note 5 to the Consolidated Financial Statements for further information. Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years.

As of December 31, 2025, $7.3 billion, or 87%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.1 billion were below investment grade. The majority of the bonds that are below investment grade were rated at the higher end of the non-investment-grade spectrum. These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.

Investments in debt securities are diversified by issuer, geography and industry. On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy. Primary risks facing many of the issuers in our portfolio include ongoing geopolitical events and economic conditions. To date, most issuers have been successful in managing these issues without a meaningful change in credit quality. We continue to monitor the economic environment and its effect on our portfolio; we also continue to consider the impact of various factors in determining the allowance for credit losses on debt securities, which is discussed in Note 11 to the Consolidated Financial Statements.

Commercial Mortgage Loans

As of December 31, 2025, our $1.2 billion commercial mortgage loan portfolio consisted of approximately 40 fixed-rate loans, diversified by property type, location and borrower. These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses. As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of December 31, 2025. Given the quality and diversity of the underlying real estate, positive debt service coverage, and significant borrower cash invested in the property generally ranging between 30% and 40%, we remain confident that the vast majority of borrowers will continue to perform as expected under their contract terms. For further discussion of the results and changes in key credit quality indicators, see Note 11 to the Consolidated Financial Statements.

Office sector fundamentals are weak but have begun to stabilize for higher-quality assets. Lower-quality assets will likely continue to experience value erosion due to weak tenant demand and low investor interest. Additionally, the current macroeconomic headwinds

are impacting capital markets and reducing investor appetite for capital-intensive assets (e.g., offices and regional shopping malls). Our commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 25% exposure to office properties. Although future losses remain possible due to further credit deterioration, we do not expect these losses to have a material unfavorable effect on our results of operations, financial condition or liquidity.

Other Long-Term Investments

Other long-term investments of $5.0 billion as of December 31, 2025 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures, and other deposit activity that is required to support various insurance and health services businesses. These limited partnership entities typically invest in mezzanine debt or equity of privately held companies and equity real estate. Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns. To mitigate risk, these investments are diversified by industry sector or property type and geographic region. No single partnership investment exceeded 3% of our securities and real estate limited partnership portfolio.

We expect continued volatility in private equity and real estate fund performance going forward as fair market valuations are adjusted to reflect market and portfolio transactions. Less than 4% of our other long-term investments are exposed to real estate in the office sector.

Unconsolidated Subsidiary Investments Portfolio

We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under the equity method of accounting. Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $18.2 billion as of December 31, 2025. These investments were comprised of approximately 70% debt securities, including government and corporate debt diversified by issuer, industry and geography; 20% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the joint venture's investment strategy and its execution. There were no investments with a material unrealized loss as of December 31, 2025. See Note 14 to the Consolidated Financial Statements in this Form 10-K for additional information regarding unconsolidated subsidiaries.

MARKET RISK

Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices. Our primary market risk exposure from financial instruments is our interest-rate risk exposure to fixed-rate, medium-term instruments. Changes in market interest rates affect the value of instruments that promise a fixed return.

Consistent with disclosure requirements, the following items have been excluded from this consideration of market risk for financial instruments: changes in the fair values of insurance-related assets and liabilities as disclosed in Note 9 to the Consolidated Financial Statements (because their primary risks are insurance rather than market risk); changes in the fair values of investments recorded using the equity method of accounting and liabilities for pension and other postretirement and postemployment benefit plans (and related assets); and changes in the fair values of other significant assets and liabilities, such as goodwill, taxes and various accrued liabilities (because they are not financial instruments, their primary risks are other than market risks).

Our Management of Market Risks

We predominantly rely on two techniques to manage our exposure to market risk:

• Investment/liability matching. We generally select investment assets with characteristics (such as duration, yield, currency and liquidity) that correspond to the underlying characteristics of our related insurance and contractholder liabilities so that we can match the investments to our obligations. Shorter-term investments generally support shorter-term life and health liabilities. Medium-term, fixed-rate investments support interest-sensitive and medium-term health liabilities. Longer-term investments generally support products with longer payout periods such as annuities.

• Use of derivatives. We use derivative financial instruments to reduce our primary market risks. See Note 11 to the Consolidated Financial Statements for additional information about derivative financial instruments.

Effect of Market Fluctuations

We determine the sensitivity of market risk for our fixed income financial instruments, including debt securities and commercial mortgage loans, by estimating the present value of future cash flows using duration modeling and applying a 100 basis point increase in interest rates. The effect of these hypothetical changes in market rates or prices on the fair value of certain noninsurance financial instruments would have been as follows:

Market scenario for certain noninsurance financial instruments

Loss in Fair Value

(in billions)

December 31, 2025

December 31, 2024

100 basis point increase in interest rates (excluding the Company's long-term debt)

In the event of a hypothetical 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $2.1 billion at December 31, 2025 and $1.8 billion at December 31, 2024. Changes in the fair value of our long-term debt do not impact our financial position or operating results since long-term debt is not required to be recorded at fair value. See Note 7 to the Consolidated Financial Statements for additional information about the Company's debt.