Whether it was cyber risks related to the COVID-19 pandemic or ransomware attacks that became increasingly severe and frequent, cyber insurers had a lot of attention this year.
As 2020 draws to a close and cyber insurers prepare for a new year, here's a look back at Insurance Journal's most-read cyber stories of the year based on reader numbers:
1. Insurance broker Gallagher reports ransomware attack
Insurance broker Arthur J. Gallagher & Co. and its claims division, Gallagher Bassett, reported that a ransomware incident on Saturday, September 26, was limiting some of its internal systems.
In a filing with the Securities and Exchange Commission (SEC), the company said it had taken all its global systems offline as a precaution, initiated response protocols, initiated an investigation, engaged third-party cybersecurity professionals, and implemented its business continuity plans to prevent disruption to its customers. .
2. Hackers based in Russia are planning a new wave of attacks on US hospitals: security company
Cybersecurity company Prevalion Inc. said in November that a Russia-based ransomware group responsible for a new wave of attacks on US hospitals is laying the groundwork to paralyze ten more. Prevailion's analysis came a day after the FBI and two other federal agencies issued a warning about an immediate and credible threat to hospitals and health care providers from cyber attacks, including ransomware that can lock down entire computer networks.
The responsible hacking group – known to some experts as UNC1878 and others as Wizard Spider – hit at least nine hospitals in three weeks, crippled critical computer systems, and demanded a multi-million dollar ransom.
3. The US Treasury Department warns cyber insurers against paying ransomware requirements
The U.S. Treasury Department warned in October that individuals or companies helping facilitate ransomware payments are in violation of anti-money laundering and sanctions rules. The warnings came in a few pieces of advice, one from the Financial Crimes Enforcement Network (FinCEN) and the other from the Office of Foreign Assets Control (OFAC).
FinCEN targeted companies that provide protection and mitigation services to victims of ransomware attacks, including digital forensic and incident response companies and cyber insurance companies that facilitate ransomware payments to cyber criminals, often by receiving fiat funds directly from customers and exchanging them for convertible virtual currency (CVC), and then transferring the CVC to criminal-controlled accounts.
4. The US cybersecurity report calls for an important role for the government in cyber insurance
A major government report on cybersecurity published in March, warning that the country is seriously under-prepared for cyber-attacks, called for the creation of a federally funded center to develop cybersecurity insurance certifications and a public-private partnership for cyber-risk modeling. The report "A Warning from Tomorrow" also called for consideration of a government reinsurance program to cover catastrophic cyber events.
"Our country is at risk not only from a catastrophic cyber attack but also from millions of daily burglaries that disrupt everything from financial transactions to the inner workings of our electoral system," the Cyberspace Solarium Commission report said.
The committee called for a strategic approach to cybersecurity which it calls "layered cyber deterrence", which aims to "reduce the likelihood and impact of cyber attacks with significant consequences".
5. US cyber insurers face a changing landscape; Top 20 cyber insurers
Cyber insurers have been making a profit for a number of years, but now face a changed risk landscape with data breaches, ransomware attacks, insurance claims and the general awareness of threats is on the rise. In a report, "Cyber Insurance: Profitability Less Certain as New Risks Emerge," rating agency AM Best noted that growth slowed significantly between 2016-2017, as recorded direct premiums grew more than 30% annually and claims in Doubled to 18,000 in 2019, up from 9,000 in 2017.
Accordingly, AM Best analysts advise carriers to focus on “more clarity in their insurance contracts to create transparent expectations for themselves and their customers”.
6. How Coronavirus Is Changing Claims, Risks, Work, Habits, Supply Chains, and More
The magnitude of the COVID-19 pandemic as an economic loss event is unprecedented for businesses and insurers alike, and claims trends and risk exposures are likely to evolve over the medium and long term as a result of the pandemic, according to a new report: Covid-19 – Changing Claim Patterns from Allianz Global Corporate & Specialty (AGCS).
With the decline in economic activity during lockdown phases, traditional property and liability claims have been subdued, particularly in the aviation and freight sectors, but also in many other industries with fewer accidents at work, on the roads and in public spaces, the report notes. While estimates vary, according to Lloyd & # 39; s, the insurance industry is currently expected to pay claims related to the pandemic of as much as $ 110 billion by 2020.
7. Cyber stands for the first time worldwide as the biggest threat to companies: Allianz Survey
According to the ninth Allianz Risk Barometer 2020, cyber incidents have been ranked as the top business risk in the world for the first time, pushing the enduring highest risk, business interruption (BI), to second place.
Cyber incidents were mentioned by 39% of survey respondents of more than 2,700 risk management experts in more than 100 countries and territories, according to Allianz Global Corporate & Specialty's (AGCS) annual survey. Seven years ago, the research report found, cyber incidents ranked only 15th with only 6% of responses.
8. Edge computing, supply chains, deepfakes among the top emerging risks of 2020: Swiss Re
Pandemic threats were once on the list of potential emerging risks facing the insurance industry and society. Now that this risk has emerged with the COVID-19 crisis, now may be a good time to take a look at the latest emerging risks, which could pose potential downside threats and upside rewards for the industry .
This is the goal of Swiss Re's latest SONAR report, which outlines 14 new risks for 2020, including the top three with the greatest potential impact: cyber security, intergenerational imbalances (highlighted by the coronavirus pandemic) and carbon removal. Taking a closer look at the report, there are eight short-term risks (less than three years) out of a total of 14 risks identified by SONAR.
9. Another federal circuit finds phishing loss covered by crime policy
Businesses of all sizes have been victims of attacks where fraudsters will use deceptive communications, such as forged emails, to trick an employee into transferring money to the fraudsters' control. While these increasingly common schemes pose an ever-present risk to companies, the case law establishing that these losses are covered by crime insurance continues to evolve.
An earlier post on the Farella Braun + Martel blog discussed Second Circuit and Sixth Circuit decisions that found cover for phishing-related losses under the crime policy. Now, with its decision in Principle Sols in December 2019. Grp., LLC v Ironshore Indem., Inc., 944 F.3d 886 (11th Cir. 2019), the Eleventh Circuit ruled that such losses are covered by policies that insure against fraudulent instructions.
10. Cyber lessons for the insurance sector will continue three years after NotPetya
This summer marks three years since the NotPetya malware attack, which has been dubbed the most devastating cyber attack in history. The NotPetya malware attack that began in Ukraine in June 2017 ultimately caused more than $ 10 billion in damage and wreaked havoc on major companies, including shipping company Maersk and pharmaceutical company Merck, which, according to reports, generated up to $ 300 million and $ 870 million respectively. lost.
Cyber experts say cybersecurity and prevention strategies have evolved in many ways since then, but they also warn that another crippling attack is never far away.
“We are always an attack away from any other market-wide event,” said Conan Ward, president of MGA / MGU Operations at QOMPLX, one at Reston, Va. based data analytics company specializing in insurance and cybersecurity.