Tag Archives: cyber insurance

On Writing a Book on Cyber Risk

Accessing information on the Internet was once likened to searching for information in a library, where the pages of all the books had been ripped out and strewn on the floor. Everyone knows that there is a colossal amount of online information about cyber security issues. How can this seemingly boundless ocean of information be processed for the practical benefit of cyber risk professionals?

This is a daunting multi-disciplinary challenge because cyber risk management spans the broad domains of information technology, risk regulation, law and criminology, security economics, insurance, as well as risk analysis.

This challenge can’t be met by one person – but it can with three. Early in 2017, Andrew Coburn conceived of the idea of a book on cyber risk, with Éireann Leverett and myself as the two other co-authors. Eireann is an ethical hacker, with specialist capabilities and technical insight into the shadowy world of cyber attack and defense. I knew he had special expertise when he showed he could hack my (Samsung) phone in five minutes.

After a brainstorming session in the RMS London office, Andrew came up with the title, Solving Cyber Risk, and after a year and a half of gestation, this book has just been published by Wiley.

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Marriott International Data Breach: A Major Industry Event

On September 8, 2018, Marriott International received an alert from an internal security tool regarding an attempt to access the Starwood guest reservation database. A subsequent investigation carried out by security specialists firm Kroll, determined unauthorized access had taken place. As the investigation progressed, Marriott discovered that the Starwood network had been accessed since 2014. An unauthorized party had also copied information and had taken steps towards removing it.

In its statement on November 30, Marriott stated that it had not finished identifying this duplicate information in the database, but believed it impacted around 500 million customers. For approximately 327 million of these guests, the information includes some combination of name, address, phone number, email address, passport number, Starwood Preferred Guest (“SPG”) account information, date of birth, gender, and arrival and departure information. For some, the information also includes payment card numbers and expiration dates, but the payment card numbers were encrypted using Advanced Encryption Standard encryption (AES-128).

With regards to the potential perpetrators, rumors have spread that Chinese state hackers might have been behind the cyberattack, although as with most cyberattacks the attribution to a specific threat actor is a lengthy and uncertain task.

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EXPOSURE Magazine: Looking Back, Looking Forward

The latest edition of EXPOSURE is essential reading for risk professionals, as we look back at what can be learned from last year’s events and look forward to the future including new challenges faced by the global risk management community and new opportunities to capitalize on.

EXPOSURE offers a unique perspective with a clear mission “… to provide insight and analysis to help insurance and risk professionals innovate, adapt and deliver.” And with a new North Atlantic hurricane season nearly upon us, and memories of HIM (Hurricane Harvey, Irma and Maria) fresh in the industry’s collective consciousness, EXPOSURE talks to the industry and paints a picture of a mature, responsible insurance sector that managed HIM with certainty and confidence. Cyber has also demonstrated its potential as a global systemic risk, and EXPOSURE looks at how events such as an outage of a major cloud services provider could generate economic losses as high as Superstorm Sandy.

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Reimagining the WannaCry Cyberattack

On Thursday April 6, 2017, President Trump ordered a Tomahawk missile attack on a Syrian military airfield. This was a direct response to President Assad’s use of sarin gas to attack Syrian dissidents. Just two days later, the password to an encrypted archive of cyber weapons (stolen from the U.S. National Security Agency) was posted by the so-called Shadow Brokers cyber group. This hacking group is thought to have connections with Russia, which is the leading supporter of the Assad regime. They were angered by President Trump’s action.

An immediate beneficiary of this password release was the Lazarus Group, linked with North Korea, which had been launching ransomware attacks at targets over the previous several months. What they lacked was an effective tool to propagate their ransomware from computer to computer. This missing tool, a Microsoft Windows bug called “EternalBlue”, they now were gifted thanks to Shadow Brokers.

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Equifax Data Heist: Patching Up a Familiar Problem

The recent Equifax incident was by all measures a significant cyberattack. As the press statement released by Equifax on September 8 highlighted, the data theft potentially impacted approximately 143 million U.S. consumers. To put this into perspective this represents nearly 70 percent of the U.S. working population.

However, we should not be surprised. RMS tracks data theft among other types of cyber events on an ongoing basis, and we have seen numerous events of this magnitude or larger over the last few years. This Equifax breach would have ranked just #7 on the list of the largest data breaches in the 2017 RMS Cyber Risk Landscape report.

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Crossing the Divide – How Cyberattacks Affect the Physical World

We tend to think that critical systems responsible for managing oil rigs, power stations, steel production plants, are somewhat immune to what happens in the “wild west” of cyberspace. News of cyberattacks tend to focus on data theft, financial heists, or bringing down websites; they are contained within IT systems. If cyberattacks are contained in the cyber world, then the logic goes that only cyber insurers should be concerned by the risk.

There is also a sense of security in the belief that critical control systems for “real world” assets and processes would either be too mechanical, too old, not connected to the same network as the wider Internet, or would run on their own networks. The reality is that industrial control systems (ICS) that manage energy, water, transport, communications, and manufacturing plants, are increasingly managed and controlled remotely or need to be networked. Wherever the systems need to use a network, the systems are exposed to vulnerabilities on that network. For non-cyber insurers, this risk needs to be assessed and managed.

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Implications of the WannaCry Cyber-Attack for Insurance

The event is arguably the most significant cyber-catastrophe to date and clearly demonstrates the systemic nature of cyber risk. A single vulnerability was utilized to spread malware to over 300,000 machines in over 150 countries causing havoc to industries as diverse as hospitals and car manufacturers.

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