Business Insurance: Another Cost Of Ransomware
Another Cost Of Ransomware: A Growing Cyber-insurance Tab
Unlike most other corporate victims, the amount the Chicago-based commercial insurer paid to the information-age version of sea pirates became public: $40 million, according to Bloomberg. That's the highest known ransom paid in the U.S. So far in what has become an alarming wave striking companies large and small. CNA isn't the first business to be struck, and it won't be the last.
With the Biden administration alarmed enough to label the emerging threat a national security issue rather just a criminal matter, companies face higher costs whether or not they're victimized. Federal officials are urging firms to upgrade and harden their systems, which will increase the cost for what already is an expensive line item for most businesses.
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And the price of insuring against such attacks is sharply rising as well, with insurers bearing much of the burden of covering the payments.
Premiums for digital protection jumped 17 percent in the fourth quarter compared with the same period in 2019 and 35 percent in the first quarter compared with the same time frame last year, according to Marsh McLennan, the world's largest commercial insurance brokerage.
"We're going to see that continue," says Ryan Griffin, senior vice president in charge of Marsh's U.S. Cyber practice in the Midwest.
"Organizations, even large ones, are seeking to do more on cyber hygiene," he says. "The insurance side of the house is beginning to enforce that through premiums."
Companies perceived to have leaky systems will have to pay more for insurance than those with stronger security.
CNA's $40 million in extortion money surely raised eyebrows in executive suites throughout the area and the country. In 2020, the average limit for insurance covering such payments was $22.8 million, according to Marsh. For companies with $1 billion or more in annual revenue, the average limit was $72.4 million.
With insurance costs escalating quickly, many companies will be forced to choose between much higher premiums for the same level of coverage they now have or reducing their claims limits.
CNA still hasn't officially confirmed the $40 million figure. In a quarterly Securities & Exchange Commission filing, it labeled the incident not material. "Although we maintain cybersecurity insurance coverage insuring against costs resulting from cyberattacks (including the attack described above), it is possible losses may exceed the amount available under our coverage and our coverage policy may not cover all losses. Further, future cybersecurity insurance coverage may be difficult to obtain or may only be available at significantly higher costs to us. Based on the information currently known, we do not believe that the March 2021 cybersecurity attack will have a material impact on our business, results of operations or financial condition."
Presumably, CNA's insurer covered most if not all of the $40 million. That's good because it amounted to 13 percent of CNA's first-quarter profit of $312 million.
In an email, the company says it "followed its established processes of determining materiality for significant developments." Since the attack, the company has added new detection technology to its systems and thoroughly cleaned them, it says.
But even after taking those steps, CNA couldn't reassure investors the same thing won't recur. "No assurances can be given, and we may be subject to future incidents that could have such a material adverse effect or may result in operational impairments and financial losses, as well as significant harm to our reputation," the company said in the filing.
Other Chicago-area companies recently struck by hackers include Rolling Meadows-based commercial insurance brokerage Arthur J. Gallagher & Co. Gallagher disclosed that it was victimized in September. "We implemented our incident response plan, took our global systems offline, isolated impacted systems, retained cybersecurity counsel and forensic experts and reported the event to the FBI," the company said in SEC filings. "The incident has been contained, and all critical systems are back in service."
It, too, said it carried insurance for the incident but added, "Disputes over the extent of insurance coverage for claims are not uncommon." Did Gallagher pay to restore its systems? A spokeswoman didn't respond to requests for comment.
Likewise, Chicago-based Rand McNally, which provides mapping and travel services, was attacked in November, with outages lasting several days. The privately held company didn't formally describe the incident as ransomware, but there were striking similarities to other ransomware examples. Rand McNally never denied reports at the time labeling the event as ransomware.
The typical methods of the hackers, often based in Russia and eastern Europe, include inserting malware in vulnerable corporate systems, which cripple operations, and then demanding payment in return for software to undo the damage. The FBI has asked companies not to pay ransom, but companies often do anyway because the costs to them of being offline for long are higher than the extortion. Invariably, the hackers ask for payment in cryptocurrency such as bitcoin.
In 2020, victims paid at least $350 million in ransomware, according to a January report by Chainalysis, a blockchain analytical firm. That was up from less than $100 million in 2019.
Cyber insurance premiums similarly are rising quickly. The industry collects about $3 billion each year currently, according to Marsh's Griffin. That's triple the amount just a few years ago and is sure to go far higher in the near future.
Rising premiums are one reason, of course, but the other is that demand for coverage is expected to soar. Even with the increased worry and attention to the issue, just 47 percent of Marsh's business clients even had a stand-alone cyber policy at the end of 2020. That was up from 42 percent in 2019.
Broker Launches Business To Offer ‘robust’ Insurance Protection Amid Pandemic
STATEN ISLAND, N.Y. -- After spending 13 years with Aflac, Anthony A. Libecci, 39, wanted to expand his benefits options to small business owners -- especially after the coronavirus (COVID-19) pandemic caused many entrepreneurs to lose a significant share of revenue.
In January, he launched Benemont Worksite Advisors in Richmond Valley -- a brokerage firm that specializes in “voluntary benefits.” Most of Libecci’s clients are small business owners, and he provides benefits packages for individuals as well.
“I wanted to be a source for business owners to look at all the different options in the market. ...We can shop the market and compete other carriers against each other to win that company’s business,” he said.
“The voluntary (worksite) benefits space has made many strides, not only in policy designs, but the number of carriers that are in the space. This has widened many opportunities for businesses, small and large, to have major insurance carriers compete for their business. The only way to truly be of value to my clients and broker partners would be to have a carrier-agnostic approach,” Libecci added.
BENEFITS COVERING COVID-19
The pandemic brought on the need by employers to have various insurance policies that cover employees who contract COVID-19, Libecci said.
“It is very important to provide benefits packages that are easier to manage and help ease stress for people during the pandemic. While the benefits that actually cover a person in the case of contracting COVID-19 are short-term disability, we also provide hospital indemnity, and critical illness all the way through to life insurance,” he said.
“The short-term is going to ensure they [people sick with COVID-19] can still receive an income while not working if they fall ill from COVID. For instance, a typical hospital plan might cover a substantial deductible amount for hospital admission due to COVID. A good critical illness plan will actually payout 100% in a lump sum if you meet the criteria,” Libecci added.
In addition, life insurance has now become one of the most sought-after benefits packages during the pandemic, he said.
“More and more people are seeing the real value of protecting their families should something unexpected happen to them,” said Libecci.
MORE THAN 30 INSURANCE CARRIERS
Libecci expanded from being an Aflac broker to now working with more than 30 insurance benefits carriers to offer his clients the most viable options.
“Now, more than ever, businesses and their employees need access to more robust benefits packages. The only way to be sure we are providing the most protection and value available is to work with 30+ benefits carriers and understand the nuances of each,” he said. “Then we can sort out ideal packages for our clients and know where they fit in per industry, based on demographics, and the type of company culture they have.”
In addition to finding the policy that best suits a client’s needs, Libecci said he offers an array of other services, from human resource technology to marketing assistance for customers.
“We are no longer in the days of cookie-cutter voluntary benefits programs. After we have chosen the right carrier for the firms’ needs, we also look at the ability to offer free technology to these firms, which are benefits administration platforms or HRIS [Human Resource Management Systems],” said Libecci.
“We administer a full-service marketing, educational and enrollment campaign in order to educate the employees on the value and particulars that their benefits package now offers them,” he said.
BENEMONT WORKSITE ADVISORS AT A GLANCE
Address: 6939 Amboy Rd.
Website: www.Benemont.Com
New Businesses in Focus is a weekly column that relates the stories of new Staten Island businesses owners.
If you have a new business on Staten Island, e-mail porpora@siadvance.Com.
Tracey Porpora is the business writer and Sunday manager for SiLive.Com/Staten Island Advance.
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The Business Health Insurance Market Includes Analysis Of Recent Development, Policies, Regulatory Landscape And Risk Analysis 2021 To 2030
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Jun 10, 2021 (The Expresswire) -- “The Business Health Insurance Market” report purpose is to deliver a definite and strategic analysis of this industry. The report explores every section and sub-segments presents in The Business Health Insurance market. It provides some insightful facts into the business parameters by accessing the market growth, consumption volume, the forthcoming The Business Health Insurance market trends, and also the different prices variation for the forecast year. In this analysis report The Business Health Insurance market dynamics, driving forces, restraints, and opportunities have also been taken into consideration to see the market’s future.
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Health insurance offers financial compensation for healthcare bills to policyholders while they are hospitalized. Health costs are incurred as a result of medical care charges and treatment for any sickness, accident, or other mental and physical disability. Health insurance shall compensate for such medical expenses in exchange for a monthly premium or a payroll tax to provide health benefits. The insurer is obliged to cover the medical costs of the policyholder until the end of the policy. Depending on the policy, coverage may vary depending on a number of factors, including diseases, age groups, government policies, and others.
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Contents1. Executive Summary2. Business Health Insurance Market2.1. Market Overview2.2. Market Definition2.3. Segmentation2.4. Assumptions and Acronyms3. Research Methodology3.1. Research Objectives3.2. Primary Research3.3. Secondary Research3.4. Forecast Model3.5. Market Size Estimation4. Average Pricing Analysis5. Market Dynamics5.1. Growth Drivers5.2. Restraints5.3. Opportunity5.4. Trends6. Recent Development, Policies and Regulatory Landscape7. Risk Analysis7.1. Demand Risk Analysis7.2. Supply Risk Analysis8. Business Health Insurance Market Analysis8.1. Porters Five Forces8.1.1. Threat of New Entrants8.1.2. Bargaining Power of Suppliers8.1.3. Threat of Substitutes8.1.4. Rivalry8.2. PEST Analysis8.2.1. Political8.2.2. Economic8.2.3. Social8.2.4. Technological9. Global Business Health Insurance Market9.1. Market Size and forecast, 2019A-2030F9.1.1. By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10. Global Business Health Insurance Market: Market Segmentation10.1. By Regions10.1.1. North America:(U.S. And Canada)• By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.1.2. Latin America: (Brazil, Mexico, Argentina, Rest of Latin America)• By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.1.3. Europe: (Germany, UK, France, Italy, Spain, BENELUX, NORDIC, Hungary, Poland, Turkey, Russia, Rest of Europe)• By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.1.4. Asia-Pacific: (China, India, Japan, South Korea, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia Pacific)• By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.1.5. Middle East and Africa: (Israel, GCC, North Africa, South Africa, Rest of Middle East and Africa)• By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.2. By Service Provider: Market Share (2020-2030F)10.2.1. Public, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.2.2. Private, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.3. By Type: Market Share (2020-2030F)10.3.1. Diseases Insurance, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.3.2. Hospitalization Insurance, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.3.3. Medical Insurance, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.3.4. Income Protection Insurance, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.4. By Coverage Period: Market Share (2020-2030F)10.4.1. Lifetime Insurance, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.4.2. Term Coverage, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.5. By Age-Group: Market Share (2020-2030F)10.5.1. Minors, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.5.2. Old-ages, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.5.3. Senior Citizens, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.6. By Network Provider: Market Share (2020-2030F)10.6.1. Exclusive Provider Organizations, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.6.2. Health Maintenance Organizations, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.6.3. Preferred Provider Organizations, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F10.6.4. Point of Services, By Value (USD Million) 2019-2030F; Y-o-Y Growth (%) 2020-2030F
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