Cyberattacks: Insurers Defend Against Ransomware

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Cyber Insurance

By: TOM DAVIS | October 2021

Key Points

  • Attacks Increasing: Since May 1, there have been at least 37 “significant” international cyber incidents, including the Colonial Pipeline attack that caused a spike in gas prices, according to a report from the Center for Strategic and International Studies.
  • Premiums Rising: Cyber premiums have more than doubled since 2016, rising from $1.3 billion to $2.7 billion last year, according to Fred Eslami, senior financial analyst at AM Best.
  • Insurers Are Selective: The cyber activity is so high now, “we can be in a position of saying to clients, ‘If you don’t have these controls in place then you’re not going to get covered for these types of attacks,’” said Tracie Grella, global head of cyber insurance for AIG.

Vishaal Hariprasad, CEO and co-founder of cyber insurer Resilience, didn’t hesitate when President Joe Biden looked right at him and asked: “How can the insurance industry help drive better cyber standards for the country?”

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Swiss Re Estimates Hurricane Ida Could Cost Insurers $30 Billion

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Hurricane Ida to be in the range of $28–30 billion

October 5, 2021

On an industry level, Swiss Re now estimates that total insured market losses from Hurricane Ida to be in the range of $28–30 billion, excluding federal flood insurance losses.

Hurricane Ida, the second-most intense hurricane on record to hit the state of Louisiana, also caused extensive wind and flood damage across the Eastern and Mid-Atlantic parts of the U.S. After making landfall on August 29, 2021, the category 4 hurricane caused wide-ranging power outages and severe infrastructure damages particularly in Louisiana, before triggering exceptional flash flooding and storm surges in the Northeastern regions of the country.

Swiss Re estimated its own preliminary claims burden from Hurricane Ida at approximately $750 million.

The estimates may need to be adjusted as the claims notification and assessment process continues.

Photo: Lyndell Scott walks past the debris of his gutted home in the aftermath of Hurricane Ida in LaPlace, La.,

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‘Long COVID’ presents comp conundrum

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By: Louise Esola | September 01, 2021

Long-term health issues following a COVID-19 diagnosis will likely affect workers compensation claims acceptance, management and disability indefinitely, experts say.

Under the catch-all phrase “long COVID,” symptoms include fatigue, chest pain, shortness of breath, joint or muscle pain, and difficulty concentrating. At least one study (see box) found 55 possible long-term effects of COVID-19.

“Navigating a patient through long COVID or long-hauler syndrome really is uncharted territory,” said Kathy Galia, senior vice president and general manager of clinical solutions for Paradigm, which provides managed care for injured workers, during a webinar in July.

While no official number is available, some organizations estimate that up to 80% of COVID-19 patients will experience one or more long-term, persistent symptoms.

“We’re in the long haul,” said Beth Burry-Jackson, Richmond, Virginia-based senior vice president of case management for Sedgwick Claims Management Services Inc., of the complicated scenario of managing COVID-19 claims with long-term symptoms.

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9/11 attacks: Industry remembers 20 years on

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Scenes of chaos, tragedy, humanity and strength still resonate

By: Louise Esola | September 1, 2021

The insurance industry had a large presence in the World Trade Center, and Tuesday, Sept. 11, 2001, began like any other morning in lower Manhattan. People had gotten their coffee on the way from the trains. They took the elevators up. They chatted with colleagues and made plans for lunch. Meetings were in session or about to begin.

But some were running late. They had doctor or dentist appointments, or they missed the train. Had gotten called to a meeting in another city. A child was sick. Or they were stuck in New York’s infamous morning commute.

Chance and circumstance determined the fate of so many people in the industry when, a short while later, lives ended and many more were changed when al-Qaida terrorists flew hijacked planes into the iconic Twin Towers.

To commemorate the 20th anniversary of 9/11, Business Insurance interviewed industry professionals who survived the attacks, who could have been there, who should have been there, and who can’t forget.

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Henri to leave Northeast Monday night, flood watches remain in effect

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Flood watches are in effect from northeastern Pennsylvania to New Hampshire.

By Meredith Deliso, Max Golembo, Melissa Griffin, Julia Jacobo, Marlene Lenthang, Ivan Pereira, Morgan Winsor, and Samantha Wnek

Henri continues to churn across the Northeast where heavy rain and flooding are still possible through Monday night.

Flood watches remain in effect from northeastern Pennsylvania to New Hampshire.

The storm made landfall as a tropical storm in Rhode Island early Sunday afternoon, bringing wind gusts up to 70 miles per hour and a storm surge of up to 4 feet to the surrounding regions. Over 9 inches of rain was recorded in Brooklyn, New York. Henri weakened to a tropical depression on Sunday night and will leave the Northeast by Monday night.

Aug 23, 12:14 pm
Tornado confirmed in Massachusetts

A tornado touched down near Marlborough, Massachusetts, Monday as Henri veered away from the Northeast.

Aug 23, 9:18 am
Biden approves emergency declaration for Vermont after New York, Connecticut, Rhode Island

The White House announced Monday that President Joe Biden has approved an emergency declaration for Vermont due to Henri, following his previous approvals for New York, Connecticut and Rhode Island.

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State, Federal Regulatory Enforcement a Focus as Cyber Crime Grows

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Ransomware attacks are on the rise and cyber risks continue to mount

By: Elizabeth Blosfield | August 4, 2021

As ransomware attacks are on the rise and cyber risks continue to mount, experts say there has been “a paradigm shift in cybersecurity enforcement.”

That’s according to Matt Levine, a partner in Phillips Nizer’s litigation department in its New York office, in the most recent episode of The Insuring Cyber Podcast. Levine has experience in criminal, civil and regulatory litigation and previously served as the first executive deputy superintendent for enforcement at the New York State Department of Financial Services (DFS).

New York led the charge as the first state to apply GDPR-like cybersecurity regulations for its financial services industry with DFS’ cyber rules – often referred to as Part 500 – implemented under a phased two-year timeline beginning in March 2017.

The regulation aims to protect New York’s financial services industry from the threat of a cyber attack and is the first cybersecurity regulation of its kind in the U.S.

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Sharp rise in lower tier catastrophe claims triggers policy changes, mitigation strategies

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Severe convective storms and wildfires have caused increasingly large insured losses over the past few years due to increased frequency and severity.

By: Matthew Lerner | July 12, 2021

A dramatic supercell over Lubbock, Texas in May of 2021. This storm previously produced a tornado and was beginning to weaken./ Reuters

While traditional windstorm catastrophe losses continue to be a major source of claims, the so-called secondary perils losses are reaching levels akin to moderate hurricane events, experts say.

Insurers continue to focus on loss prevention and risk engineering to combat the rising secondary peril losses but have also begun to make defensive moves.

Secondary perils caused $57.4 billion or 71% of worldwide insured losses from natural catastrophes in 2020, with the main drivers being severe convective storms and wildfires in the United States and Australia, according to a March report by Swiss Re Ltd.

From 1990 through 2020, aggregate U.S.

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3 Ways Life Sciences Companies Can Reduce the Non-Insurance Costs of Product Liability Claims

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Litigated claims could impact reputation and market share in ways no policy can cover. Here’s how proactive risk mitigation reduces the expense.

By: The Hartford | June 1, 2021

White Paper Summary

Product liability claims in the life sciences industry are unique. In many cases, the products in question make a direct impact on consumers’ health. When they don’t perform as intended or cause an injury, the consequences can be severe. Especially in the context of social inflation, product liability claims can potentially cost life sciences companies millions.

What many in the industry don’t realize is that a portion of these costs can’t be recouped from a product liability policy.

“These unexpected costs can be categorized as immediate or deferred costs. Immediate costs would include additional legal costs to respond to heightened regulatory scrutiny incurred after a claim. It also includes losses absorbed in attempts to restore reputation. Companies may need to offer discounts or refunds, for example, to retain existing business, which may not be reimbursable damages under a customary insurance policy,” said Tom Morelli, Claims Representative in The Hartford’s Major Case Unit.

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Hardening Medical Malpractice Rates, a Slew of COVID Claims and What It All Means for the Health Care Sector

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The COVID-19 pandemic has made an already-hardening insurance market in the health care sector even harder.

By: Maura Keller | June 7, 2021

The COVID-19 pandemic has wreaked havoc on all segments of the health care industry, including the medical malpractice market, which has continued to harden over the last 12 months.

As a result, the past year has seen prices, exclusions and limitations increase and capacity reduce, in part because some carriers left the market. The pandemic also placed tremendous pressure on hospitals, health care providers and long-term care facilities.

“The industry anticipates that, in addition to inevitable claims arising from the spread, diagnosis and treatment of COVID-19, there will be claims arising from the pandemic’s impact upon the availability of health care and health care resources, such as claims resulting from the delay or cancellation of procedures deemed elective,” said Dennis Cook, senior underwriting executive, IronHealth, Liberty Mutual.

“The anticipation of these indirect COVID-19 claims has added to the hardening of the market.”

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New York Regulator Issues Guidance for Insurers Writing Cyber Policies in the State

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By: Elizabeth Blosfield | March 8, 2021

The New York State Department of Financial Services (DFS) has issued new guidance for New York-regulated property/casualty insurers that write cyber insurance. This serves as the first guidance the regulator has issued on cyber insurance in particular.

“Cybersecurity is the biggest risk for government and industry, bar none,” said DFS Superintendent Linda Lacewell in a press release issued by her office.

As part of the guidance, called the Cyber Insurance Risk Framework, DFS is calling on regulated insurers to establish a formal strategy, approved by the insurer’s board or other governing entity, for measuring cyber risk based on the insurer’s size, resources and geographic distribution, among other factors.

In particular, insurers are urged to take measures to manage and eliminate exposure to silent cyber risk, which occurs when cyber exposures exist within a traditional property and liability policy that does not specifically include or exclude cyber risk.

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Updated Climate Change Risk Models Are Giving Insureds and Underwriters a Better Chance to Defend and Restore Property

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AIR Worldwide has updated its hurricane and wildfire models to get more granular insight on long-term climate risk.

By: John Hintze | April 20, 2021

As it builds out a framework to model future climate risk, AIR Worldwide made changes last year to its hurricane and U.S. wildfire models with the goal of providing insurers and their clients with more accurate assessments of those morphing risks.

The catastrophe (CAT) modeling firm described in detail last June its longer-term project, which began three years ago and blends its “traditional hybrid, physical, and statistical approaches with a new set of tools that come from the world of artificial intelligence — specifically machine learning.” AIR anticipates the new framework will provide insight into “not only today’s new climate questions, but also tomorrow’s.”

There is “huge demand” from insurers and across industries to quantify the impact of climate change in the near, medium and long term, according to Liz Henderson, senior managing director of analytics at Aon.

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Time to Get Uncomfortable: Addressing Diversity & Inclusion in Insurance

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True progress in promoting diversity and inclusion in insurance will require a departure from the “safety” of comfortable silos.

By: Kiara Taylor | April 16, 2021

The events of the last year have brought an increased emphasis on diversity and inclusion within the commercial insurance industry.

Some of these events have been strikingly visible, such as the widespread protests that followed the death of unarmed Black men. Others, such as the disproportionate effect that the COVID-19 pandemic has had on ethnic and racial minorities in the U.S., have remained largely invisible.

Insurance cannot expect to solve these issues alone, of course, but neither can it lag behind when it comes to tackling social injustice. Indeed, as professionals many of us feel that we have a responsibility to use our knowledge, experience and influence to work for a better society.

Risk & Insurance®, as an affiliate of The Institutes, is committed to moving things forward.

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