UnitedHealth Group on Tuesday named board Chairman Stephen Hemsley as its new chief executive officer, replacing Andrew Witty.
The insurer also suspended its 2025 outlook, sending shares down 9% in premarket trading in New York. It said it expects to return to growth in 2026.
The CEO appointment is effective immediately, following Witty’s decision to step down as CEO for personal reasons, the company said in a statement. Hemsley will remain chairman.
Hemsley, 72, joined UnitedHealth as chief operating officer in 1997 and served as CEO from 2006 to 2017, when he became board chair. He pledged to return the company to its “long-term growth objective of 13 to 16%.”
The company said it pulled its outlook as medical costs of many Medicare Advantage beneficiaries new to the company remained higher than expected. UnitedHealth is the largest seller of the health plans.
The insurer planned a call with investors at 8 a.m. to talk through the changes it outlined.
UnitedHealth has faced a turbulent run since the December killing of a top executive. The company faced a torrent of vitriol on social media from people fed up with the U.S. health-care system.
In April, the company cut its annual guidance — a rare move for a business known for forecasting conservatively — and reported its first earnings miss in more than a decade. Shares in the company fell 23% in one day, the most since August 1998, erasing about US$115 billion of market value.
Blindsided by rising medical costs, the company’s performance “was frankly unusual and unacceptable,” Witty, who is 60, told analysts following the results.
John Tozzi, Bloomberg News
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