September 23, 2021 by Canadian Underwriter Staff
As brokers grapple with an evolving cyber insurance market, one managing general agent is looking ahead to help the industry keep pace.
George Bozanin, managing partner and head of business development with Coalition Insurance Canada, told Canadian Underwriter the post-pandemic shift to hybrid and virtual work models have created the perfect environment for cyberattacks to continue surging.
“In 2020, because there was a rush to get up and running quickly during the pandemic, security risks were often overlooked. It’s easy to forget that what makes it easier for employees to access their accounts and sensitive information remotely also makes it easier for hackers to target and access the same information,” Bozanin said.
“The rapid change in how we work gave cybercriminals access to a largely untapped pool of new targets, and they were often able to remain undetected for longer periods of time when planning their attack strategy.”
Over the past year, Coalition policyholders who experienced a claim due to exposed remote desktop protocol (which allows a user to connect to a Windows computer remotely) increased from 29% to 40%, while the severity of these incidents increased by 103%, according to Coalition’s 2021 Claims Report.
“Another unfortunate result of widespread reliance on remote capabilities were several supply chain attacks, systemically crippling hundreds, if not thousands of businesses simultaneously.”
While Coalition expects the market will continue to evolve, the company’s claims, incident response and insurance teams made the following predictions for the remainder of 2021:
Ransomware will remain the biggest cyber threat for all organizations
Ransomware remains the most lucrative cybercriminal activity, and the widespread use of poorly secured remote-access protocols and tools on the internet will continue leaving organizations open to ransomware attacks. “As a result, we expect ransomware frequency to increase moderately. Conversely, we expect that ransomware severity will flatten as there is little leverage left to be gained beyond that which criminals already have after taking an organization’s operations hostage,” Bozanin said.
The cyber insurance market will continue to harden throughout the year
It will be more difficult to qualify for cyber insurance, and the implementation of many common cybersecurity controls will increasingly be required as a condition of coverage. “We predict many insurance carriers will also begin to require companies to address identified vulnerabilities during the policy period — or risk losing some (or all) coverage. Price increases, co-insurance and sub-limits on critical coverages are already happening, and will continue throughout 2021,” Bozanin said.
Supply chain attacks will become more common
Criminals will increase their targeting of software and service providers. “Supply chain attacks allow criminals to victimize a large number of organizations at once, rather than just one, Bozanin said. “As organizations increase their reliance on cloud software and service providers, they open themselves up to more risk — risk they will struggle to control,” Bozanin said.
Criminal attacks will follow nation-state attacks
Several high-profile attacks over the past year, including against Mimecast, SolarWinds and Microsoft Exchange, were believed to be instigated by nation-state actors, Bozanin said. “While these attacks are typically motivated by espionage rather than financial gain, the exploits used often eventually make their way into criminal hands, as evidenced with the Microsoft Exchange vulnerabilities disclosed earlier this year. We expect this trend to continue.”