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Business Journalists: Digital Dangers, and How to Beat Them
Every business has become reliant on digital interactions to keep the wheels turning, yet the system is failing. The cause could be criminal activity, or something more mundane: like a lost laptop, a coding error, or a vendor outage. Business may then come to a halt, measured in lost revenue per minute. As digital interactions increase, businesses and institutions are increasingly exposed to the world’s ever-evolving technologies. Every new business process expands the threat of disruption and is therefore a potential source of loss. It is critical to assess possible disruptions and calculate their potential financial impact. Risk management and insurance are essential.
Every company is different
Every organization’s digital footprint is different, so some may benefit from a tailored insurance solution. To advise on available insurance solutions, a comprehensive analysis may be beneficial. At EmergIn Risk, we focus on this industry first, as companies within this industry tend to have broadly similar technology profiles. Next, extensive consultation with our clients helps us understand the architecture of their personal networks and workflows, overall operational technology, logistics and industrial control systems within their departments. We focus on external contacts to create a personalised image of our clients.
loss
Once we have a solid understanding of how an organization uses technology, where it invests in systems, and what vulnerabilities could lead to disruption, we consider a variety of realistic loss scenarios and their potential impact. These include:
- Operational-level ransom events that disrupt core systems, stop order and accounting functions, and deny access to critical information
- Unplanned interruptions in production due to IT failures
- Once existing inventory is exhausted, third-party interruption of production leads to interruption of raw material supply
- Failure of first- or third-party delivery systems resulting in delayed shipments and storage pressure
We work hard to identify each client’s risk exposure and then calculate the eventual likely cost for unavoidable risks. This understanding allows us to design and price appropriate cyber insurance against any identified outage, even others that may not be identified.
EmergIn is primarily an excess insurance underwriter. We work with major insurance companies to provide each client with a solution to meet their specific needs. A range of cyber threats can lead to huge losses requiring higher levels of coverage. To name a few:
- Many production-focused companies suffered huge losses after just an hour of disruption.This is especially true for clients who make large trades, such as stock exchanges
- In cyber extortion cases caused by ransomware, criminals often demand millions of dollars to restore systems and allow operations to resume.For example, a large U.S. P&C insurance company paid a ransomware group $40 million to release systems and data stolen by hackers
- Service-oriented retail and hospitality companies often suffer huge revenue losses due to system failures that prevent them from meeting customer demands 24 hours a day. In late 2018, a major hotel chain announced that one of its reservation systems had been compromised, with attackers stealing hundreds of millions of customer records, including credit card and passport numbers.The hack caused massive reputation damage, lost customers, and caused millions of dollars in losses through notifications, business interruptions, and ICO fines
- Business-to-business suppliers may lose contracts that are orders of magnitude higher in value than actual contracts due to reputational damage following a network outage.Recent attacks on U.S. oil and gas infrastructure will damage the confidence of its customers, potentially leading to the loss of commercial contracts
The cyber threat landscape is constantly changing and evolving at breakneck speed. The same goes for insurance coverage that insurance companies are willing to support their customers. At EmergIn, we seek to understand each client’s unique cyber risk profile, mitigate and manage that risk as much as possible, and provide insurance solutions for serious residual risks.
EmergIn’s knowledge of the entire process allows us to gain a deeper understanding of the large losses that can affect a particular company. For this reason, complex technology-dependent businesses may not be well-served by automated insurance platforms for tailored cyber risks. For the work it does, EmergIn sees technology as an enhancement, but not a replacement for an understanding-based analytical underwriting process.
Organizations continue to evolve rapidly, with digital interactions multiplying and increasingly embedded in every business interaction. The number of ways systems can fail and the many ways criminals can exploit them is changing at an equally astonishing rate. To keep pace, the cyber insurance industry is evolving at an equally fast pace. As our clients invest in the latest technologies, we at EmergIn work tirelessly to understand how those investments introduce vulnerabilities and create coverage that helps address the risk profile of new technologies head-on.
Learn more about EmergIn Risk’s innovative enterprise-grade solutions at EmerginRisk.com
EmergIn Risk operates through a number of legal entities, the choice of which depends on where these entities are authorized to operate. In the UK, EmergIn Risk is a trade name of Ryan Specialty International Limited, authorised and regulated by the Financial Conduct Authority (FRN 733324). Company number 07164987. In the European Economic Area, EmergIn Risk Europe is the trade name of Ryan Specialty Nordics AB (Ryan Specialty Nordics) authorized by the Swedish Financial Services Authority. Organization number 556741-6572. In the United States, EmergIn Risk is operated by EmergIn Risk, a family of RSG Underwriting Managers, LLC, a Delaware limited liability company (Ryan Specialty Underwriting Managers). Ryan Specialty International, Ryan Specialty Nordics and Ryan Specialty Underwriting Managers are subsidiaries of Ryan Specialty, LLC. EmergIn Risk works directly with brokers, agents and insurance companies and therefore does not solicit insurance from the public. Certain products may only be available in certain jurisdictions, and certain products may only be offered by surplus line insurers in the United States. In California: RSG Insurance Services, LLC (license #0E50879). © 2022 Ryan Specialty, LLC (NYSE: RYAN)
Originally Posted in business reporter
