Shares of UnitedHealth Group tumbled in premarket trading after the insurer announced the sudden resignation of CEO Andrew Witty and the suspension of its 2025 financial outlook.
UnitedHealth Group appointed Stephen Hemsley, its board chairman and former CEO (2006-2017), as its new CEO, replacing Andrew Witty, who stepped down for personal reasons.
"We are grateful for Andrew's stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced," Hemsley said, adding, "The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best."
The major health insurer also suspended its 2025 financial outlook, citing higher-than-expected medical expenditures:
Additionally, the company suspended its 2025 outlook as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, and the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected.
In April, UnitedHealth Group reported weaker-than-expected Q1 results and issued a significant downward revision to its full-year guidance, citing higher-than-expected Medicare needs. This was the insurer's first earnings miss in over a decade.
UnitedHealth Group expects to return to growth in 2026...
"UnitedHealth Group has tremendous opportunities to grow as we continue to help improve health care and to perform to our potential — and, in so doing, return to our long-term growth objective of 13 to 16 percent," the new CEO said.
As of Monday's close, UnitedHealth Group shares are locked in a bear market, down 25% for the year. News of the sudden CEO resignation and suspended outlook pushed the stock down another 10% in premarket trading—sending shares to a four-year low if losses hold into the cash session.
Just to clarify: UnitedHealthcare is the health benefits business of UnitedHealth Group.
In premarket trading, the shares of peers Elevance Health, CVS Health, and Humana all fell between 2 and 4%. Cigna and Centene fell between 1% and 2%.
On Monday, President Trump pushed ahead with his pledge to eliminate drug industry middlemen, which sent shares of Cigna, CVS Health, and UNH lower.
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Rough times for the healthcare industry...
