Re-Insurance

Hackers take advantage of Covid-19 disruption

  • In the shadows: cybercriminals are exploiting vulnerabilities they find as a result of employees working remotely during the Covid-19 pandemic (Photograph by Wilfredo Lee/AP)

Widespread remote working due to the Covid-19 pandemic has given cybercriminals increased options for infiltrating and disrupting the computer networks of businesses.

Experts discussing cyberinsurance highlighted the worrying trend.

Kara Owens, of Markel Corporation, said: “Hackers have been taking advantage of Covid, the whole work-from-home environment, and Covid constantly being in the news.

“They have been utilising different phishing attacks, using World Health Organisation or something to do with Covid in the title of e-mails to get people to more likely click on it.”

Ms Owens, who is managing director, global cyberunderwriting executive at Markel, said: “We are seeing more fraudulent wire transfer with the financial institution space from Covid.”

She added: “A lot of budgets have been cut at companies, including potentially IT staff. Going into the long term, what are some of the aftermaths of that going to be?”

Ms Owens was a panellist on an AM Best-hosted webinar that explored the state of the cyberinsurance market, and issues arising in the wake of the coronavirus pandemic.

Fred Eslami, associate director, AM Best, said there had been billions of dollars of economic losses caused by ransomware and data breaches in recent years, and the frequency, severity and sophistication of the attacks had increased.

He added: “This is concerning at a time when we are in the middle of remote working due to the pandemic. What effect might that have on corporations in terms of business interruptions and other losses?”

Garmin, which makes lifestyle and sports performance-tracking watches, is the latest high-profile corporate victim of a cyberattack.

Last week it was hit by a ransomware attack, and a reported $10 million demand from a cybercrime gang that encrypted sensitive parts of its network.

The company has this week started to restore its systems.

Ms Owens said: “We’ve just seen Garmin hit by a ransomware attack.

Every week these attacks seem to be popping up with some bigger names; Cognizant was another large one — that will be fairly substantial to the [insurance] industry.”

Cognizant, the world’s largest IT-managed services company, was hit by a ransomware cyberattack in April.

Ms Owens said: “It’s not just large companies that are getting hit, but also smaller companies. Everyone is a target, all different industries.”

Also on the panel was Catherine Mulligan, global head of cyber, reinsurance solutions, Aon. She said last year was “the year of ransomware”.

She added: “It was working in the background, then in 2019 it hit across all industry sectors and all sizes of business, and got the attention of insurers.”

Ms Mulligan thought insurance linked securities could play an important role in the growth of cyberinsurance.

She said: “There is a feeling that ILS is a natural home for something like cyber, and investors have been receptive to assuming these types of emerging risks, subject to a better understanding of the modelling and managing their concerns about correlation with the financial markets. Putting together a fully syndicated cat bond could be really exciting for the market.”

While Mr Eslami said: “The increase in severity and frequency of cyberattacks are concerning, but at the same time, it provides good opportunities for insurance companies, and for companies to utilise the benefit of insurance for themselves.”