WellPoint Inc. President and CEO Angela Braly resigned Tuesday amid investor frustration with disappointing financial results at the nation's second-largest health insurer.
The Indianapolis-based company announced that its executive vice president and general counsel, John Cannon, will serve as interim president and CEO. With Braly's departure, lead director Jackie Ward was named the non-executive chair of the board of directors, WellPoint said.
Ward says Cannon does not wish to be considered as a candidate for permanent CEO. The company said it has hired an executive search firm to help in find a replacement for Braly, who took over as president and CEO in 2007 and added the title of chair of the board in 2010.
Investors had become increasing anxious about WellPoint's performance over the past year. Last month, WellPoint cut its 2012 profit forecast and reported second-quarter earnings that fell short of Wall Street's expectations, triggering a sharp drop in its share price.
The company's shares rose nearly 3 percent in extended trading following Wednesday's announcement of Braly's departure.
WellPoint signaled, however, that it would stay the course, despite the change at the top.
"Our board continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela's leadership," Ward said in a statement. "But now is the right time for a leadership change."
The company's directors "believe the remaining executive team is dynamic and strong, with great potential to drive WellPoint's future success," Ward added.
WellPoint announced earlier last month it would spend about $4.46 billion to buy Amerigroup Corp., which runs Medicaid coverage in 13 states. Medicaid is the state-federal program that provides coverage for the needy and disabled. Insurers see lucrative growth opportunities in working with people who qualify for both Medicaid and the federally funded Medicare program.
Earlier this year, the insurer also completed its acquisition of contact lens retailer 1-800 Contacts Inc., and it continues to expand a Medicare Advantage plan provider it acquired last year.
Braly and Wellpoint became a focal point for criticism during the health care overhaul 2010, after complaints spread about plans to increase premiums by around 25 percent for individual insurance policies sold by the insurer's Anthem Blue Cross subsidiary in California. The company later backed off that rate hike.
WellPoint runs Blue Cross Blue Shield plans in 14 states and is second only to UnitedHealth Group Inc. in both revenue and enrollment.