Topline
Shares of UnitedHealthcare’s parent company led a broader selloff in health insurance stocks, losses one analyst described as a likely result of the industry’s fresh focus following the Wednesday killing of UnitedHealthcare’s chief executive Brian Thompson.
The Minnesota-based company led a negative week for health insurance stocks.
Key Facts
UnitedHealth Group stock fell 4.7% by midafternoon Friday, extending its weekly loss to 9.6%.
That would be the U.S.’ most valuable health insurance company’s worst week on Wall Street since March 2020 and its fifth-steepest weekly loss this decade.
Shares of Anthem Blue Cross Blue Shield parent Elevance Health dipped 1.3% on Friday, bringing its weekly loss to 5.7% as the company grappled with its own specific backlash tied to a since-rolled-back change to its anesthesia claims processing in three states.
Other health insurance players, like Cigna (down 1.3% on Friday, 5.7% this week), Centene (-1.8%, -5.1%) and Humana (-0.3%, -4.6%), dropped as well.
Centene hit its lowest share price since 2020 and Elevance its lowest since 2021.
Why Is Unitedhealth Group Stock Down?
The massive UnitedHealth-led losses did not have a typical catalyst for such a steep, industry-spanning decline, such as weak quarterly financial results, worse than expected profit guidance or a significant change in legislation. In fact, UnitedHealth guidance for 2025 shared ahead of the investor day canceled due to Thompson’s murder was in line with Wall Street expectations. “We suspect this week’s share declines are related to the subsequent discourse about the potential motive of the shooter,” Morningstar analyst Julie Utterback told Forbes, nodding to the extensive discussions this week about UnitedHealth’s industry-low processing of customer claims, adding “potential coverage decision changes induced from internal initiatives or external pressures may come with risks for industry profits.”
Crucial Quote
“The anti-insurer sentiment expressed by the public after this event suggests that UnitedHealth and perhaps the industry may need to adjust how they handle coverage decisions,” Utterback added. “Otherwise, they may face the wrath of the public, which will hopefully come in a more civilized form—such as increased regulation—than what happened this week.”
Big Number
$53 billion. That’s how much market value UnitedHealth Group lost this week, according to YCharts data. The Minnesota-based company remains by far the largest health insurance provider by market capitalization, with a market cap of about $510 billion, more than five times greater than its next biggest publicly traded rival, Cigna.
Key Background
Thompson was murdered in midtown Manhattan early Wednesday. No suspect is in police custody. Thompson’s killer allegedly used bullets inscribed with three words—“deny,” “defend,” and “depose”—an apparent reference to a 2010 book “Delay Deny Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It.” The 50-year-old Thompson led UnitedHealth Group’s core health insurance unit, which brought it about half of the company’s $32 billion operating profit in 2023. Thompson was a “smart, thoughtful, capable and compassionate executive who was liked and respected by his peers,” remarked Deutsche Bank analyst George Hill in a Thursday note to clients.
