CYBER INSIGHTS
CYBER ATTACKS
A QUESTION OF RESPONSIBILITY
BY GWENYTH P . LUU
If one thing hasn ’ t slowed down as a result of the upending of the world in the last couple of years , it is cyber threats . In fact , they have increased across the board . The threats and their related services are higher interlinked . Business interruption insurance , the pandemic , and cyber threats combine to demonstrate one of the largest vulnerabilities the modern , more connected world has to face . Security protocols to defend against cyber threats have not caught up with the advancing technology and rapidly changing workplace , and being caught off guard in that way has led many companies to face huge losses .
The way business has changed over the last couple of decades has led to an increasing reliance on outside parties for data management and a slew of other services through SaaS
( software as a service ) companies . Unfortunately , changing from inhouse solutions to outside vendors for many of these enterprise services and applications has led to lax security protocols . Often , these companies do not update response plans for events like cyberattacks and often do not have adequate offsite backups of their data .
Cyber criminals , in turn , have begun taking advantage of holes in security . The weakest link in any security plan is often the humans who must implement it , and switching to remote work and working from home , sometimes on personal electronic devices , is much harder to monitor , secure , and test . According to a report from the United States Government Accountability Office ( GAO ), the number of clients seeking cyber threat mitigation and cyber insurance has
doubled between 2016 and 2020 . What has become a benefit to brokers and agents is rapidly becoming a risk for the insurers they utilize .
During 2020 and 2021 alone , cyberattacks of all types on organizations of all sizes have increased steeply , especially when it comes to ransomware . Those attacks have led to a similar increase in claims and have placed a huge strain on carriers ’ portfolios . What is the result ? There has been an uptick in tension between agents and carriers , and insurers have increased premiums and changed the practices they use for underwriting . They have also become wary of insuring aggregated portfolios .
THE INDUSTRY BEING REALISTIC
It is tempting to look on the bright side , and there are absolutely positives
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