UnitedHealth Group shocked investors on Tuesday by suspending its 2025 financial forecast and announcing the unexpected departure of CEO Andrew Witty, just weeks after the company had already lowered its outlook.
The twin announcements triggered an 8% drop in UnitedHealth shares during premarket trading, News.Az reports, citing CNBC.
The ripple effect extended across the health insurance sector, with shares of Humana, CVS Health, and Elevance Health falling between 1% and 3%.
Stephen Hemsley, who served as CEO from 2006 to 2017, will take over from Witty. Hemsley joined the company as chief operating officer in 1997 and became president in 1999.
The U.S. health insurance industry has been grappling with increased costs since mid-2023 due to a surge in demand for healthcare services under government-backed Medicare plans for older adults or individuals with disabilities.
In April, UnitedHealth posted its first earnings miss since 2008 and lowered its annual outlook, citing higher-than-expected medical costs and “unanticipated changes” in its Optum business that impacted planned 2025 reimbursements.
The industry also had a rough 2024, hurt by lower government payments, elevated medical costs and public backlash against the sector after the murder of UnitedHealth’s then-insurance-unit head Brian Thompson late last year.
Thompson’s fatal shooting also unleashed a social media storm of patient dissatisfaction and ire over the health insurance industry’s practices, adding to the company’s woes.
UnitedHealth expects to return to growth in 2026, it said on Tuesday.
