Emy Donavan, Global Head of Cyber at Allianz Global Corporate & Specialty, provides an update on the world of cyber risk, including an increase in attacks on consumer devices, malware as a business, and tips for risk managers looking to prepare for inevitable attacks.
More recent developments in cyber risk include an increase in attacks on consumer devices such as cellphones, and the “ransom-ware of things”, such as connected televisions. Ms. Donavan sees a need for more creative cyber insurance products and believes cyber coverage as part of homeowners insurance will happen in the near future. Self-driving automobiles also represent a shift in potential liability from manufacturer to another business, rather than to a consumer, and will require new insurance products to adjust to the shift.
Ms. Donavan says many consumers are surprised to know that “malware as a service exists.” ‘Hackers for hire’ enable any company to launch a cyber-attack without doing the work themselves. She notes that reviews of hackers exist on the dark web, and hackers now offer customer service and call centers. “Hacking is an industry” and represents an unprecedented transfer of wealth.
Risk managers need to have a plan to deal with potential cyber-attacks. Ms. Donavan suggests risk managers conduct a ‘tabletop exercise’ with all the people who would need to respond to a crisis. Often the IT people in a company are unaware of the cyber insurance coverage acquired by the firm before responding to an incident, and potentially prejudicing the company’s position. Any coverage purchased should be included in an emergency response plan.