Star Health hit with ransom demand over data leak

India's biggest health insurer, Star Health, said on Saturday that it had received a ransom demand of $68,000 from a cyber hacker related to a recent leak of sensitive customer data and medical records.

A reputational crisis faces the company, with a market capitalization of about $4 billion since a Reuters report on September 20 went live and detailed how a hacker utilised Telegram chatbots and a website to expose customers' personal information, including tax details and medical claims.

Star Health has announced that it has launched an internal investigation following the incident and has initiated legal action against both the hacker and the messaging platform, Telegram, which has been associated with the data leak. The hacker's website continues distributing samples of information on its customers, adding another layer of complexity to the situation of the insurer, whose shares have fallen 11% since the news broke.

This was after investigations by Indian stock exchanges on allegations against the company's chief security officer, Amarjeet Khanuja, involving the data breach. Star Health said no wrongdoing has so far been traced to the part of Khanuja as it said to continue with its probe.

Although Star Health is said to have issued notices on multiple occasions, Telegram has declined to reveal information about such accounts or relinquish permanent action against accounts involving xenZen, identified with hacking. It was Star Health that approached the Indian authorities for identification. For its part, Telegram also did not respond to questions on the development. Until now, the platform has claimed it took down bots after being informed about the same by Reuters.