UPDATE 2-UnitedHealth replaces CEO with Optum unit head Witty

(Adds analyst comments, background)

Feb 4 (Reuters) - U.S. health insurer UnitedHealth Group Inc named the head of its Optum unit, Andrew Witty, as its new chief executive officer, replacing David Wichmann, who has been at the helm for just over three years.

The appointment is effective immediately, the company said on Thursday, adding Wichmann, 59, will retire.

Witty, 56, who was the chief executive officer of British drugmaker GlaxoSmithKline Plc from 2008 to 2017, had been on an unpaid leave until December to serve as a global envoy for the World Health Organization’s COVID-19 efforts.

The move surprised Wall Street analysts. BMO Capital Markets’ Matt Borsch said investors are likely to respond negatively on uncertainty as Wichmann’s term as CEO seems “cut short” at under 3.5 years.

UnitedHealth’s shares fell 1% to $334.39 on Thursday.

Dirk McMahon, CEO of UnitedHealthcare unit, will be the new president and chief operating officer of the company.

The company declined to comment beyond the press release.

UnitedHealth last month reported higher-than-expected fourth-quarter profit, as medical costs came in lower than Wall Street estimates even with increased spending related to the surge in COVID-19 cases in December.

Witty was named the chief executive officer of the Optum unit, which manages drug benefits and offers healthcare data analytics, in March 2018.

UnitedHealth has been bolstering the business through a string of small deals in the past few years.

Wichmann, who joined the company in 1998 and became CEO in September 2017, will stay through March, the company said.

Reporting by Manojna Maddipatla and Ankur Banerjee in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila