Tag Archives: Companies

Hacking, a new issue for insurance companies

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Every year hackers are responsible for enormous losses in companies. No matter where the company is located, cyber-attacks can occur. This problem is not something new and has existed for the past 10 years. Nevertheless it is a growing phenomenon because of the ubiquitous nature of the Internet, which is present in almost every household and company in the Western world.

 

The lack of security presents opportunities for cyber attackers to penetrate your company and steel sensitive information’s. For this reason I invite you to read this article : 5 tips to protect your business from Hackers.

 

To measure the amplitude of those attacks, here are some major breaches occurring in this century:

 

  • In December 2006: Albert Gonzalez and 11 other hackers, has broken the security system of tjx companies (American apparel and home goods company). Tjx networks were not protected by any firewalls, which resulted in the exposure of 94 million credit cards.
  • April 20, 2011: 77 million Playstation networks have been hacked, additionally 12 million credit cards were unencrypted. Sony has suffered enormously after this attack as the site was shut down for a month.
  • July 2011: Estsoft a South Korean software developer has been the victim of the biggest theft of information of South Korea. This resulted in 35 million Koreans being exposed, which is the majority of the population. A lot of information has been stolen from millions of users, among others: birthdates, ID numbers, addresses etc.

 

The list of major breaches is longer and is growing every year (lien).

 

The problem faced by insurance companies does not lie in the providing of insurance for big enterprises but in the capacity of covering the total amount of losses in certain cases. For the most serious hikes, insurance increase deductibles but in some situations limit the refund to 100 millions of dollars, which means that sometimes only half of losses are covered or even less.

For companies that already experience some breaks, the renewal of their insurance costs them, in some cases, 3 times more than at the beginning.

 

However, these problems also offer new opportunities for insurers. Even if the level refunded by insurance corporations is often lower than the real loss caused by hacker attacks; those major events underline the importance of having protection.

As the demand for protection is rising, insurers raise their prices. According to pwc during next 5 years prices for cyber insurance market will rise to 7,5 billion dollars in US.

More here

 

The real problem is that while prices are skyrocketing, the insurance will not increase the security. Furthermore most policies will not work due to the lack of security. Perhaps companies should increase their preventive measures in order to avoid further attacks.

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