Anthem Inc (NYSE:ANTM) is one of the largest health insurance stocks on the market.
And now, thanks to news of the recent Anthem data breach, it is also victim of one of the largest data breaches of the last few years. 
Anthem reported that as many as 80 million customers had their account information stolen by hackers, including sensitive data that includes Social Security numbers and street addresses.
Mandiant, a cybersecurity firm enlisted by the insurer to help it clean up in the aftermath of the Anthem data breach, says this is the “largest healthcare breach to date.”
So what does the Anthem data breach mean for customers that carry its insurance brands like Blue Cross, for ANTM stock holders worried about hackers’ impact on profits, and for the increasingly high-stakes field of cybersecurity?
Anthem Customers Need to be On Guard
In the details revealed thus far about the Anthem data breach, it appears that hackers did not steal any medical information from the health insurer. Rather, they were after other information — presumably to use in nefarious ways.
That means if you have an Anthem insurance brand, it’s time to start regularly checking your online banking statements for signs of fraud.
It also may be a good idea to change your account login if you have an uncreative password like “Password1” or your favorite sports team’s name. This includes all insured Americans who have Anthem, Blue Cross Blue Shield and Wellpoint branded coverage.
The basic idea of a hack like this is to get information that can be used elsewhere to nefarious ends. It doesn’t take a big leap of faith to assume hackers armed with your street address and Social Security number can figure out what credit cards you have or where you do your banking.
The Anthem data breach is scary stuff, yes, but the good news is that financial institutions are getting increasingly adept at detecting fraud as it happens and declining suspicious transactions at the point of purchase. Furthermore, should a fraudulent transaction go through, major banks and credit card companies can quickly credit your account and issue replacement cards.
It’s an inconvenience to keep one eye on your transaction history or to order a replacement card, but that is certainly preferable to seeing hundreds or even thousands drained out of your bank account.
Watch your accounts closely in the coming months for suspicious activity.
ANTM Stock Investors Shouldn’t be Overly Worried
Thankfully for Anthem stock holders, shares have held firm since the news came out. This is a very different reaction then what happened at retailer Target Corporation (NYSE:TGT) after a massive data breach was bungled, ultimately costing the company some $250 million.
That’s largely because Anthem’s core business — healthcare — isn’t directly affected by this breach, since medical records weren’t the target of the attack.
There will assuredly be expenses here as ANTM unwinds this mess and updates its systems to prevent another breach in the future. But the problems at Target stemmed from a retailer having problems with the very nature of transactions in its stores, which had a chilling affect on sales in addition to serious challenges with day-to-day operations.
This is not to minimize what happened to customers who lost personal information, just to put it in context. After all, Anthem is largely in the business of billing doctors and collecting premiums from employers with group plans — not swiping credit cards at a cash register.
That makes the impact less serious to Anthem as a business.
And as long as it can deal swiftly and effectively with the fallout, there’s no reason to think this will have a chilling effect on whether doctors and patients continue to trust ANTM and its related brands.
Cybersecurity Again In Focus
Cybersecurity continues to make the news, and will continue to be a very closely watched topic going forward. Because while it would be nice to think that this Anthem data breach is the last of its kind, that’s just wishful thinking.
As our recent investigation into the cost of fraud revealed, there are some 16.6 million victims of identity theft each year in the U.S. — twice the population of New York City! So it’s honestly just a matter of time before this happens again, and perhaps at an even bigger scale.
Cybersecurity firms are rising to the challenge, however. Spending on high-tech security measures is estimated to have hit $71 billion last year — an 8% increase over 2013’s numbers. And spending is expected to increase at a compound annual growth rate of 10% through 2020, showing that this is not a short-term trend.
If you’re an investor looking for opportunities in the years ahead, you could do worse than focus on big-name cybersecurity stocks that include Palo Alto Networks Inc (NYSE:PANW), Fortinet Inc (NASDAQ:FTNT) and Symantec Corporation (NASDAQ:SYMC), among others.
And if you’re a consumer just trying to protect yourself? Well, get used to checking — and rechecking — your transaction history.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.
