Medibank cyberattack could be costly ‘on multiple fronts’

The sample data comes from Medibank’s cheaper ahm brand and its international student services, which have about 1 million customers combined. The data includes names, addresses, dates of birth, Medicare numbers, contact information plus sensitive health information.

The hackers claim to have stolen 200 gigabytes worth of data including customer credit card information and sensitive health records. Staff from the Australian Federal Police and Australian Signals Directorate, the nation’s cyber agency, are embedded in Medibank and investigating the breach to try to stop the data getting released more widely.

Based on the hackers unverified claims to possess 200 gigabytes of data, Morningstar’s Zaia said tens of thousands of policyholders could be affected.

“Assuming this [data] includes verification documents of a few megabytes each, we estimate this amount of data could easily encompass 30,000 policyholders,” Zaia said.

With limited information, it is hard to assess the adequacy of Medibank’s cyber protection, and whether it acted quickly enough, and hence, whether it would “incur material brand damage, fines, and management scalps”, his report said.

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Despite the publicity, Zaia and analysts at Jefferies expect the fallout to be limited in terms of customer impact.

“We expect a period of disruption to slow policyholder growth but not a mass exodus of customers or a material step-up in the cost base,” Zaia said.

According to Reuters, Jefferies analysts say affected customers will be concerned and more likely to switch to Medibank’s competitors than those unaffected, but the relative cybersafety of Medibank’s peers would be hard to assess as they are largely unlisted.

NIB group is the only other ASX-listed private health insurer.

Medibank requested a voluntary suspension from trading on Friday, while it continues to investigate the hacking incident. The suspension expires on October 26.

Medibank shares last traded on Wednesday at $3.50.

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