Anthem Inc.’s brand has taken a noticeable hit since hackers stole nearly 79 million customer records from the health insurer’s computer systems earlier this year.
But the impact was blunted by positive perceptions of the way the company handled the breach and large numbers of consumers continue to view Anthem and its Blue Cross and Blue Shield health plans more favorably than other insurers.
Those were the findings of a recent survey by Los Angeles-based Wedbush Securities. It surveyed 1,022 consumers via the Internet both before and after Anthem disclosed the data breach on Feb. 4. The breach has sparked nearly 100 lawsuits seeking class-action status.
Wedbush analyst Sara James wrote, “while the data breach had a net negative impact, there is still a core group willing to pay more for the brand. This brand awareness and preference will be key, in our opinion, as Anthem continues to grow in the consumer sector of public and private exchanges as well as Medicare.”
Before the data breach 51 percent of consumers said Anthem Blue Cross Blue Shield was a better brand than other insurers and After the breach, that figure dropped to 45 percent.
Other insurance brands mentioned in Wedbush’s survey included UnitedHealthcare, Aetna and Cigna.
There was actually an 8-point drop in the percentage of consumers who, before the breach, had viewed Anthem as a better brand. But this was offset a bit by a 2-percent increase from other consumers who previously did not view Anthem as better, but changed their mind after seeing how Anthem handled the attack.
Anthem passively enrolled all its customers in a basic identity theft protection program after the attack. It also gave members the option to sign up for more extensive protection, at Anthem’s expense.
Anthem did not learn of the breach until Jan. 27—even though hackers first gained access to its systems on Dec. 10. Anthem made the breach public one week after discovering it, but then took several more weeks before mailing instructions to consumers telling them how to sign up for up the ID theft protection service.
Before the breach, 24 percent of consumers were willing to pay more to have an Anthem plan. But after the rbach, only 21 percent were.
Again, there was a divergent reaction. Nearly 11 percent of customers decreased the amount extra they would be willing to pay to have an Anthem plan over another insurer, with the average reduction being about 5 percent.
But 7 percent of consumers, who had not been willing to pay a premium for Anthem plans, are now willing to do so based on Anthem’s response to the attack.
Wedbush found more favorable reactions to Anthem from younger and older consumers than from those in between. On the Obamacare exchanges, where Anthem has sold policies covering 898,000 people, the data breach actually helped Anthem, instead of hurting it.
James wrote, “he willingness to pay for the Anthem brand actually increased after the breach. We believe this could reflect the awareness of the younger exchange population to the proliferation of data breaches following hacking attacks on many large corporations and the willingness to pay more for a service that addresses the breach quickly and effectively.”