MW UnitedHealth shooting sparks security fears for execs but fixes are expensive and complicated
By Steve Gelsi
Security company execs have seen a dramatic increase in inquiries for services after the murder of Brian Thompson
The fatal shooting of Brian Thompson, the head of UnitedHealth Group Inc.'s insurance division, has alarmed executives and companies across the nation but finding solutions to security concerns remains expensive and complicated.
Police arrested 26-year-old Luigi Mangione on Monday in connection with the shooting and charged him with the murder of Thompson.
Reports have surfaced that Mangione suffered from serious back pain and that he wrote a manifesto about how the United States houses the "most expensive healthcare system in the world" while ranking 42nd in life expectancy.
Also read: As UnitedHealth shooting puts health insurance in focus, 4 million people could get priced out of coverage if Congress doesn't act
Christopher Falkenberg, founder of InsiteRiskManagement and a former special agent in the U.S. Secret Service, said attacks have been on the rise against health-care professionals across the board, from insurance executives to doctors.
Falkenberg said companies may talk up security in the wake of the tragedy in a practice he described as "security theater," but the reality is that insurance companies and other big organizations may hesitate to pay the full costs of beefing up protection for all senior executives. Thompson was the chief executive of UnitedHealthcare, the insurance arm of UnitedHealth Group Inc. $(UNH)$, and was not the top person on the corporate organizational chart.
Data shows that the cost of security has risen sharply.
In 2023, according to data from Equilar, companies in the S&P 500 SPX that hired security for executives outside of the office spent a median of $98,069 on extra measures such as bodyguards and home security systems - typically for only one or two of their most senior executives. While the figure is small for a large company, it's still up sharply from 2022 when S&P 500 companies paying for extra security spent a median of $75,997 in total. Still, only 27.6% of S&P 500 companies even provided such additional security in 2023.
On top of the dollar cost, executives must also sacrifice some personal freedoms in exchange for their protection.
"It's intrusive and intimate to have a higher level of security," Falkenberg said. "It detracts from peoples' quality of life."
The legwork involved in protecting executives must start well before any CEO or other high-ranking corporate officer steps out in public, he said. Threats need to be identified and prospective attackers should be profiled ahead of time and monitored, Falkbenberg added.
Security firms will often deploy technologies to scour the dark web and social-media sites and identify potential shooters. It's then up to a professional to analyze the data and advise their client on credible threats.
Most people who issue threats don't plan to deliver on them, but if someone is already mentally unstable and is looking for someone to blame for personal tragedies, they can become more dangerous, Falkenberg said.
Brittney Blair, senior director at financial crimes, risk, and regulatory advisory firm K2 Integrity, said, "It's been non-stop this week" in terms of calls from existing and prospective clients inquiring about security.
"Everyone is a little bit on edge this week and rightfully so," Blair said.
Executives at big companies don't always realize that they could be targeted in public, even if their company has received threats.
"Executives see themselves as regular guys - not a public figure," Blair said. "The sad reality is if someone feels obsessed with profiling someone at a company they'll know who that CEO is."
Ideally, it would have been much safer if Thompson were taken to the UnitedHealthcare Group's investor-day meeting in New York by a car inside a loading dock or parking lot of his hotel, she said. Instead, Thompson was walking by himself on the sidewalk without any security guards when he was fatally shot.
Scott Solomon, chief executive of Operational Security Solutions, a security and risk management company, said more prospective customers have been reaching out to his company after the shooting this week in New York City.
"It was a major security event that's become a major media event," Solomon said. "We've gotten a dramatic increase in inquiries for services that would have been effective in this case."
Organizations are more concerned about being targeted for their work or policies, Solomon said.
Along with its secure cash-logistics business and security consulting, OSS had been in the business of providing security personnel for executives but it pivoted out of that practice because it's a competitive business with large competitors, he said.
Thompson was walking by himself to a UnitedHealth Group investor day when he was shot and killed.
Etchings found on the bullets with the words "deny," "defend" and "depose" on them may suggest that the shooter was frustrated with the U.S. healthcare system and issues involving denial of healthcare-insurance claims.
After Mangione's arrest, reports surfaced that he had suffered from serious back pain. Police said he had written a statement about how the United States houses the "most expensive healthcare system in the world" while ranking 42nd in life expectancy.
Also read: UnitedHealthcare exec's killer may have left a message - here's what we know
Companies and executives need to update their threat assessment, which typically includes an analysis of vulnerabilities and any threats on social media or menacing messages or actions to family members, Solomon said.
"Physical threats usually have had some kind of engagement first on social media or email," Solomon said.
One source familiar with a major bank said the shooting has had a global impact on businesses. Most of the largest U.S. financial institutions employ large in-house security teams.
"Every company around the world is probably making sure their security protocols are as safe as possible," the source said.
CFRA analyst Caydee Blankenship told MarketWatch she expects defense specialists such as Science Applications International Corp. $(SAIC)$ , CACI International Inc. $(CACI)$, Booz Allen Hamilton Holding Corp. $(BAH)$ and Leidos Holdings Inc. (LDOS) to provide some comments in their fourth-quarter results on the market opportunity to provide security to government contractors and companies that do business with the government.
These and other companies provide private security services to companies, which also maintain in-house teams to protect executives.
"It's a very touchy area - if someone gets denied insurance, a lot of emotions get involved," CFRA analyst Blankenship told MarketWatch.
Companies such as CACI may get a boost from clients seeking to use more AI products to scan for threats in social media or even video surveillance systems, she said.
Some providers include Torchstone Global, Constellis (formerly Triple Canopy), as well as big defense contractors such as CACI, SAIC and Northrop Grumman Corp. $(NOC)$
-Steve Gelsi
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December 10, 2024 15:27 ET (20:27 GMT)
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