Reflecting the ongoing performance pressures health insurance companies are facing in an industry that is redefining itself amid regulatory and economic uncertainty, the high-profile CEO of Indianapolis-based health insurer WellPoint, Inc. , Angela F. Braly, has submitted her resignation, following disappointing financial results. In a press release, WellPoint confirmed it is "actively searching for a candidate to succeed" Braly. "The Board of Directors has established a search committee to consider both internal and external candidates, with the assistance of a search firm.
WellPoint reported that EVP, General Counsel, Corporate Secretary and Chief Public Affairs Officer John Cannon will serve as interim President and CEO. Cannon reportedly has removed himself from consideration for the permanent CEO position. The insurer also announced that Jackie M. Ward, WellPoint's Lead Director, has been named the Non-Executive Chair of the Board of Directors effective immediately. She stated, in the press release, "Our Board continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela's leadership, from the sale of the pharmacy benefit management business to Express Scripts to the recent and proposed acquisitions of CareMore, 1-800-CONTACTS and Amerigroup. But now is the right time for a leadership change. We believe the remaining executive team is dynamic and strong, with great potential to drive WellPoint's future success, and John Cannon in particular is the right person to lead our most important initiative, which is the completion of the Amerigroup transaction."
According to an article in today's Wall Street Journal:
"The abrupt shift came as the board's leadership had been meeting with major investors in the wake of a disappointing second-quarter earnings report that sharpened concerns about Ms. Braly and the company's strategy... Though Ms. Ward, on behalf of the board, had issued a statement expressing support for the company's direction just a month ago, pressure mounted rapidly as the board heard from some major shareholders such as Omega Advisors and T. Rowe Price Group Inc., which sent a letter raising concerns about WellPoint's performance and direction in the wake of the earnings release, according to a person with knowledge of the matter."
There also reportedly concern about executive turnover under Braly, who had been WellPoint's CEO since 2007. However, until recently Braly, one of the few female insurance company CEOs (not to mention female CEOs in any industry), had gotten good reviews for initiatives geared toward leading the company into the more consumer-driven, analytics-based healthcare market. She ranked number 24 on this year's Forbes list of The 100 Most Powerful Women, which was published earlier this month. Braly's profile in the Forbes report notes: "With the support of the 'fully involved' board, even after disappointing earnings, Braly is pushing acquisitions to capitalize on health care reform and diversify WellPoint's revenue streams."