Recently, one of the largest Australian private health insurance providers, Medibank Private [ASX:MPL] was the subject of a vicious cyberattack that targeted the personal data and health information of around 10 million members.
Today, the group finally shed some light on the cost involved in recovering and protecting the lost customer information at the group’s investor presentation at the Macquarie conference this morning.
MPL kept mostly flat in the share market shortly after, around $3.53 a share.
The stock holds strong in its sector at a 15% advantage, and it has increased by nearly 20% so far in 2023, up 11% on the market average:
Source: Market Index
Medibank’s cyberattack update
Late last year, Medibank was at the centre of a mega cyberattack scandal that rocked the media, the public and the markets.
The company, which consists of more than 3.7 million customers, claimed the hacker had stolen 200GB of data and brandished 100 policies as evidence it was not bluffing.
Among the information stolen by the hackers were names of customers, addresses, birth dates, Medicare numbers, claims information, and possible credit card numbers.
The insurance provider has been under some fire for not being more transparent during the investigations that soon ensued, accused of preferring to keep the public in the dark about details of the attack as ongoing findings progressed, but today it had something to say.
The group declared about $45 million is expected to be incurred due to the recovery and protection of lost customer information, as told at today’s Macquarie conference.
The cybercrime costs are expected to be at the top end of the $40–45 million range, not counting class action suits or other legal and regulatory-related costs that will undoubtedly be linked to the event.
Deloitte, the investigating body, has made recommendations to enhance Medibank’s IT processes and systems, several of which Medibank says have already been implemented.
The group concluded: ‘At this stage we do not expect a material increase to recurring IT costs resulting from the cybercrime.’
Medibank’s Q4 and 2023 expectations
The company also looked to its performance in the near future and said that there could be double non-resident gross profit in FY23.
It stated that policyholder growth increased by 0.02% at the end of March, which was reported in comparison with the prior year.
Medibank expressed expectations for a strong fourth quarter, claiming positive momentum will lead into fiscal 2024, and expects to announce another ‘customer give back’ before 30 June this year.
With students and visa workers returning to Australia after the pandemic drought, the group managed to up its fiscal year-to-date policy unit growth from 62,000 to 258,500 by the end of the March quarter.
Medibank expects FY23 industry policyholder growth to grow by 2%, compared with 2.7% growth in FY22.
The group says it is well-positioned to address the cost-of-living concerns and health needs through continued investment in dual brand propositions.
The company said:
‘Our strategy continues to meet the changing needs of customers while generating value for shareholders and bringing about much needed change in the health system.
‘We continue to expand our reach in health in both the private and public system, building strong relationships with multiple health providers with new relationships.’
Source: MPL
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Regards,
Mahlia Stewart,
For Money Morning
