As companies of all sizes regularly navigate financial and operational challenges, business owners may not be aware of the need to protect the company's data against cyber breaches. Other companies' leaders may know about cyber risks but do not believe their businesses present good targets for cyberattacks.
However, malicious cyberattacks have greatly increased in the past couple of years and are now a primary concern among risk managers. Hauser Insurance Group states that over 60% of small- and medium-sized businesses have been targeted by cyberattacks. Each cyber breach carries an average price tag of $3.86 million, according to 2020 research from IBM and Ponemon Institute.
Proactive business owners should take immediate steps to mitigate these substantial data security risks. Hauser Insurance Group utilizes CyberCube, a data-driven software analytics tool designed to assess a company's cybercrime risk. Armed with that knowledge, Hauser Insurance can determine the insurance coverage necessary to mitigate that hazard.
The Pandemic's Effect on Cybercrime Growth
The 2020 COVID-19 Pandemic wreaked worldwide havoc on both organizational and personal levels. Government-ordered lockdowns meant countless businesses were shuttered and millions of employees were told to work remotely from home. Other workers suddenly found themselves laid off.
Drastic Increase in Cybercrime Targets
During the pandemic, many companies transitioned to digital operations to accommodate the new remote work structure. Communications between home-based coworkers took place on residential networks. Mobile phones and personal computers were suddenly pressed into business use.
This large-scale increase in unsecured network operations meant cybercriminals had more potential access points from which to extract information. As might be expected, cybercrime occurrences ramped up dramatically during 2020's pandemic lockdowns.
Besides the actual cybercrime impacts, analyses of pandemic-era computer network operations revealed the inadequacy of many companies' information technology frameworks. In addition, many businesses were found to be operating with shoddy security protocols.
Ransomware Becomes a Top Threat
Many opportunistic cybercriminals focused their efforts on ransomware attacks. Worldwide, there was a 40% increase in ransomware occurrences during the first three quarters of 2020 compared to the same 2019 timeframe.
Many ransomware attacks have become automated in nature. This development demonstrated that cybercriminals are becoming more sophisticated and have access to the latest technology.
Hauser Insurance Group, through data provided by the Coveware ransomware analytics firm, notes that United States-based companies are most frequently targeted by ransomware cybercriminals. Small- to medium-sized businesses are the target of over 60% percent of ransomware attacks.
Larger companies are generally assumed to have better cybersecurity precautions in place. However, cybercriminals have increasingly been using artificial intelligence to execute their attacks. Thus, larger companies are now more vulnerable to ransomware incidents.
Worse yet, skilled ransomware operatives can now access companies' core and backup computer systems alike. Not surprisingly, these cybercriminals are mining data from the hacked networks, threatening to release sensitive information unless a business meets the hackers' ransom demands.
Ransomware as a Service
Enterprising cybercriminals have adapted the "software as a service" concept to the ransomware industry. Thus, subscribers can take advantage of "plug and play" ransomware tools to execute targeted attacks. Equipped only with bank account information, hackers can cause electronic disaster for businesses in every industry.
Cybercrime Outlook for 2021
In 2021, the COVID-19 pandemic has gradually subsided, and many companies have welcomed their workers back to the office. However, a substantial number of businesses have kept the remote workforce model to save on operating expenses.
In addition, the global economy continues to become more digitized. ECommerce transactions and business automation continue to grow, and new technologies such as 5G networks drive even further innovations. Collectively, these millions of new entry points mean cybercriminals have virtually unlimited opportunities to harvest users' sensitive data.
The Ransomware Landscape
Ransomware continues to be cybercriminals' most lucrative method of data breach monetization. Many companies choose to pay the ransom and keep the issue under wraps. These business owners view the ransom payment as a lower-cost impact compared to the economic and reputational damage caused by ignoring the ransom demand.
To put a halt to the ransomware economy, varied countries' governments and regulatory agencies are looking at the available options. In October 2020, the United States government reiterated its position that cyber insurers who pay the ransom are violating applicable laws.
However, in view of other global kidnapping and ransom occurrences, making ransoms more difficult to collect will not solve this complex problem. Resourceful cybercriminals will simply find other ways to obtain ransom payments.
Good "Cyber Hygiene" as a Preventive Strategy
Business owners can take a proactive role in protecting their company's cybersecurity interests. Adjusting operational and security protocols, and educating employees on appropriate precautions, are important first steps.
Remotely working employees should receive additional guidance on avoiding phishing and fraud attempts. Collectively, the newly coined term "cyber hygiene" refers to this combination of tactics designed to keep a company's data safe from cyberattacks.
Profile of the CyberCube Security Tool
Data security firm Symantec developed the CyberCube security tool in 2015. Targeted to the insurance industry, this software as a service (SaaS) platform enables aggregate modeling of cyber risks for insurance underwriting purposes.
In 2021, CyberCube is a standalone business that benefits from ongoing access to Symantec's high-level analytics tools and resources. Team members include multidisciplinary experts in cybersecurity, software engineering, and data science.
Experienced commercial insurance and actuarial modeling professionals also play key roles on the CyberCube team. Collectively, CyberCube is well positioned to provide creative solutions to complex cyber risk insurance challenges.
Hauser Insurance Group Utilizes CyberCube
Hauser Insurance Group has adopted the CyberCube security tool, a data-driven analytics tool that quantifies a company's risk posture. The business' existing security controls are also integrated into the equation.
Using this information, a Hauser Insurance Group risk mitigation expert recommends the appropriate cyber insurance package. Each targeted insurance program addresses business interruption concerns along with breach response issues. Extortion scenarios, along with regulatory and lawsuit implications, are also discussed in a typical cyber insurance policy.
These multifaceted insurance programs are suited to private equity businesses and private equity owned companies. Privately held firms and public companies also find Hauser Insurance Group's offerings useful.
About Hauser Insurance Group
Hauser Insurance Group is a diversified privately held insurance company based in Cincinnati, Ohio. Established in 1971, this respected firm has provided targeted risk management and insurance solutions to clients in diverse industries. Hauser Insurance Group is also known for its employee benefits services expertise.
Hauser's Global Client Base
Hauser maintains a specialized focus on private equity firms and their respective portfolio companies. Where targeted acquisitions are involved, the Company also offers coverage for those exposures.
Currently, Hauser Insurance Group serves over 70 private equity firms and portfolio companies across 44 states.
Skilled Team of Specialized Advisors
Hauser's clients benefit from the specialized expertise of a nationally recognized team of advisors. Team members include risk advisors, merger and acquisition specialists, and brokerage professionals focused on private equity brokerage and consulting work.
The Company's due diligence competencies include the risk management and insurance solutions functions. Other areas of due diligence expertise include insurance brokerage, transactional support, and employee benefits.
Because each client's needs are complex in nature, Hauser Insurance Group uses a consultative approach to address these highly individualized requirements. By recommending targeted insurance products, including cyber risk insurance packages, each client will be well prepared for a wide spectrum of business challenges.