Title: UnitedHealth Discloses $1.6 Billion Estimated Cost of Ransomware Attack

In a recent financial report, UnitedHealth, the parent company of healthcare technology provider Change Healthcare, revealed the staggering costs it incurred due to a ransomware attack that occurred in February 2024. The company disclosed that the total expenses related to tending to the cyberattack amounted to $872 million for the first quarter of the year.

Additionally, UnitedHealth provided significant financial support to care providers affected by the attack, including advance funding and interest-free loans, which totaled over $6 billion. The company stated that the attack had a considerable impact on its operations, with an estimated cost of $0.74 per share in the first quarter. This figure is projected to rise to a range of $1.15 to $1.35 per share by the end of 2024.

The consequences of the attack are ongoing, as UnitedHealth continues to allocate resources for remediation efforts and business disruptions. As a result, the total expenses related to repairs and operational disruptions are expected to exceed $1 billion over time. This figure includes a reported payment of $22 million made to the ALPHV/BlackCat-affiliated criminals responsible for the attack.

This staggering cost makes the UnitedHealth ransomware attack one of the most expensive cyber incidents in recent times. Notably, it surpasses the expenses faced by casino group MGM, which experienced a similar attack in the previous year but chose not to pay a ransom. MGM now faces recovery costs of $100 million for system rebuilding and mitigating the aftermath of outages, operational disruptions, and potential data leaks.

The financial results disclosed by UnitedHealth are noteworthy as this is the first time the company has revealed the direct and business costs associated with the cyberattack. The attack severely affected hospitals and pharmacies across the United States, impeding their ability to provide essential care.

UnitedHealth reported revenues of $7.9 billion for the first quarter, but this was offset by a net loss of $1.221 billion. The company provided an adjusted earnings per share figure of $6.91, which includes the impact of $0.25 in "business disruption" but excludes costs related to its direct response to the cyberattack, totaling "$0.49 per share." It is anticipated that these direct response costs will rise, with UnitedHealth estimating an impact of $0.85 to $0.95 per share for the full year of 2024.

The company further warned that the total financial impact of the cyberattack is projected to range between $1.35 billion and $1.6 billion for the entire year of 2024. As UnitedHealth continues to battle the repercussions of the attack, it remains committed to safeguarding its operations and the healthcare services it provides to millions of Americans.

Disclaimer: The information provided in this article is based on the financial report released by UnitedHealth.