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UnitedHealth Group shares sank to their lowest level in more than four years after the insurance group said that former chief executive Stephen Hemsley was returning to the helm as its current boss Andrew Witty stepped down.
The largest US health insurance company by revenue said on Tuesday that Witty was quitting the top job immediately for “personal reasons” as it suspended its annual outlook. UnitedHealth shares were down 16 per cent in afternoon trading on Wall Street, reaching their lowest level since November 2020.
Witty, who was appointed chief executive in 2021, has overseen the group through a tumultuous period. UnitedHealth slashed its profit forecast less than a month ago. It is also grappling with the aftermath of the killing last year of Brian Thompson, who was the CEO of its sprawling insurance division. Witty was also CEO of GlaxoSmithKline from 2008 to 2017.
Hemsley, UnitedHealth’s executive chair, was CEO from 2006 to 2017, and had held senior positions at the group since the late 1990s. He will remain the chair of the board.
“I am deeply disappointed in and apologise for the performance setbacks we have encountered with both external and internal challenges,” Hemsley said on an investor call on Tuesday.
He did not give additional information about why Witty was leaving, but said the outgoing leader would remain a senior adviser.
In addition to its insurance business, UnitedHealth runs medical practices across the US. The company in mid-April slashed its annual profit forecast after a surge in demand for medical services from older customers that was “far above” expectations. The cut also reflected a “greater than expected” hit from reductions to spending on older patients by the previous Biden administration.
Since December, UnitedHealth has been beset by “broad regulatory concerns” and questions about its coverage decisions, Morningstar said in a research report on Tuesday. “The murky outlook for 2025 and executive suite shake-up inject more uncertainty into the situation,” the firm said.
UnitedHealth, which covers about 50mn Americans, is also dealing with a US antitrust investigation over its status as the country’s biggest health insurer.
The shake-up at UnitedHealth coincides with the Trump administration’s efforts to reduce US drug prices.
President Donald Trump said on Monday he hoped to achieve that in part by facilitating Americans’ access to medicines directly from pharmaceuticals groups, bypassing intermediaries. UnitedHealth is among the US’s biggest pharmacy benefit managers, which act as intermediaries for the drug industry.
Shares of UnitedHealth peers Cigna and CVS sank after Trump’s announcement.
