Health Insurance Stocks Decline Following CEO's Death

By Sriparna Roy

(Reuters) – Shares of health insurance companies including UnitedHealth Group (NYSE:UNH) continued to decline on Friday, two days after Brian Thompson, the CEO of the company's health insurance unit, was fatally shot outside a Manhattan hotel by a gunman lying in wait.

The shooter remains at large, and his motive for the attack has yet to be determined, according to police officials.

Thompson's death has ignited a widespread conversation on social media about frustrations with the U.S. health insurance system, especially concerning medical expenses that are not covered or when insurance claims or requests for care are denied.

Analyst Julie Utterback from Morningstar commented, "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."

On Friday, shares of UnitedHealth fell by 4.8% after a 5% drop on Thursday. Rival insurers Elevance, Centene (NYSE:CNC), CVS Health (NYSE:CVS), and Cigna (NYSE:CI) also experienced declines between 1% and 3% during afternoon trading, following losses on Thursday.

Police sources revealed that the words "deny," "defend," and "depose" were inscribed on shell casings found at the scene. These words may reference Jay Feinman's 2010 book critical of the U.S. insurance industry, titled Delay Deny Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It.

Social media has been inundated with posts criticizing the companies, with users sharing personal dissatisfaction regarding coverage rejections and denied necessary care. Sarcastic videos with messages like "thoughts and prayers require prior authorization" have circulated widely.

In response to the incident, health insurance companies are reevaluating risks for their executives, as both UnitedHealth and CVS have removed photos of their leadership teams from their websites following the shooting.

Potential changes in coverage decisions could result from either internal initiatives or external pressures, which may pose risks to profits, according to Utterback.

The insurance industry has been dealing with rising costs over the past few quarters due to heightened demand for healthcare under government-backed Medicare plans for older adults or individuals with disabilities, as well as changes in Medicaid eligibility initiatives by states, leading insurers to cater to a larger patient base requiring more medical services.