Top line
Shares of UnitedHealthcare’s parent company led a sell-off in health insurance stocks, losses that one analyst described as the likely result of the sector’s new direction after Wednesday’s assassination from the CEO of UnitedHealthcare. Brian Thompson.
The Minnesota-based company had a negative week for health insurance stocks.
Key facts
UnitedHealth Group stock fell 5% on Friday, extending its weekly loss to 10%.
It was the worst week on Wall Street for the most valuable U.S. health insurance company since March 2020 and its fifth-largest weekly loss this decade.
Shares of Elevance Health, parent company of Anthem Blue Cross Blue Shield, fell 3% on Friday, bringing its weekly loss to 6% as the company grappling with its own specific reaction related to a change since then in the processing of anesthesia requests in three states.
Other health insurance players, like Cigna (-2% Friday, -6% this week), Centene (-2%, -5%), and Humana (-1%, -5%), also fell .
Centene hit its lowest stock price since 2020 and Elevance its lowest since 2021.
Why are Unitedhealth Group shares falling?
The massive losses driven by UnitedHealth did not have a typical catalyst for such a steep, industry-wide decline, such as weak quarterly financial results, worse-than-expected earnings forecasts or a significant change in legislation. In fact, UnitedHealth’s 2025 forecast shared before the canceled investor day due to Thompson’s murder was in line with Wall Street’s expectations. “We suspect this week’s share declines are related to the ensuing discourse about the shooter’s potential motive,” Morningstar analyst Julie Utterback told Forbes, in a nod to this week’s in-depth discussions. on the action of UnitedHealth. lowest in the industry handling customer complaints, adding that “potential changes in coverage decisions driven by internal initiatives or external pressures may pose risks to 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 could face public anger, which will hopefully take a more civilized form – like increased regulation – than what happened this week.” »
Large number
55 billion dollars. 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 capitalization of approximately $510 billion, more than five times that of its second-largest listed rival in scholarship, Cigna.
Key context
Thompson was murdered Wednesday morning in midtown Manhattan. No suspects are in custody. Thompson’s killer allegedly used bullets marked three words– “deny”, “defend” and “deposit” – an apparent reference to a 2010 book “Delay Deny Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It.” Thompson, 50, led UnitedHealth Group’s core health insurance unit, which brought him about half of the company’s $32 billion operating profit in 2023. Thompson was a “smart, thoughtful executive , capable and compassionate who was appreciated and respected by his peers.” “George Hill, an analyst at Deutsche Bank, noted in a note to clients on Thursday.