ldoherty

A vast majority, or 96%, of the claims managers surveyed reported an increase in the number of properties that are underinsured in the past 12 months, with rapid inflation in the cost of building materials often mentioned as the cause of the rise.

To back the research findings, Gallagher cited an October 2022 official government data showing a 16.7% increase for ‘all work’ year-on year. More specifically, the cost of cement had an increase of 18% between September 2021 and September 2022, the price of steel went up by 13%, and the cost of timber rose by 35% year-on-year. 

Gallagher’s research also found that more properties are also underinsured in part due to rising labour costs, according to 61% of claims management experts. When it comes to what’s causing construction labour cost rises, 85% cited inflation, and just over three-quarters, 77%, said that Brexit was a major factor due to the decreased availability of labour.

Unfortunately, the majority (65%) of business leaders who own their premises have not reviewed their commercial property insurance during the past year, indicating that many could now be at risk. Some have gone even longer without looking at their policy, with one in six (16%) not having reviewed their insurance at any point in the last five years.

The most common reasons among business owners for not reviewing their property valuation was thinking that nothing had changed since last time they checked (29%), trying to keep insurance costs down while inflation is causing budget constraints elsewhere (23%), and simply being too busy with other priorities (20%).

 Despite this, many who own their premises said that one or more of their properties has needed major repairs (18%) in the past 12 months.  

Claims managers also noted that it is taking longer for commercial property repairs to complete – taking an average of an additional 33% compared to this time 12 months ago due to supply chain delays and the lack of available construction workers.

As a result, eight in 10 (805) claims managers said many businesses may have too short a term specified on their business interruption cover – the insurance that pays for loss of earnings while a property is unusable.

“Property underinsurance is at a record high currently because of issues, such as inflation and the rising cost of materials,” Gary Fletcher, Gallagher’s managing director for the South in the UK, said. “However, business owners also often make the mistake that the valuation of the property is based on what it would sell for – and as property prices haven’t changed a great deal over the last year – that the valuation is the same.

“In fact, the valuation is based on rebuild costs which have unfortunately risen dramatically over the last year. As a broker we advise our clients on their insurance, and the need to review their cover when issues like this arise, but some businesses won’t necessarily realise the extent of the issue.”  

Fletcher added that business leaders have a range of increasing costs to cope with, as inflation remains stubbornly high.

“The knock-on effect of inflation on commercial property and business interruption insurance shouldn’t be ignored,” he stressed. “Your insurance broker can advise how to go about a valuation to ensure that cover is valid.

“With construction and labour costs as they are – and supply chain issues meaning businesses who need to repair or rebuild might be closed for longer than expected – it is currently very important to make sure you take time to check your cover.”

Source

Geopolitical uncertainty, energy issues, and other challenges have caused rough sailing in the marine insurance industry. However, Insurance Business UK’s (IBUK) 5-star marine insurers for 2022 have remained resilient in the past 12 months, helping brokers either increase their premium volume or maintain it at the same level.

IBUK selected the best marine insurance providers in the UK for 2022 by sourcing feedback from insurance brokers. The research team conducted a survey with a wide range of brokerages to determine what brokers value in a marine insurer and asked 100s of brokers across the country to rate the marine insurers they had worked with over the past 12 months.

Source

1. Where do you think UK PI market is heading in 2023?

An interesting question. After the hard market years of 2019 and 2020 (made worse by the pandemic) and 2021 the UK PI market has seen signs of significant softening in the last two Quarters of 2022. This has mainly been within the SME sectors albeit there has been more competition in the larger mid-size sectors especially Excess of Loss/Cat markets where softening usually first starts when a cycle changes. Softening usually then starts with broadening of coverage followed by premium pricing reductions.

This year we have seen inflationary pressures affect the cost defence litigation especially within the construction sectors where the cost of raw materials and labour costs have risen dramatically, this has made insurers review upwards their initial claims reserving.

Global interest rates have shot up since the summer, few would have foreseen base rates move north at the pace they have, with more rate rises forecast in 2023 to try to dampen inflation. Interest rate rises will have an adverse effect on employment. Commercial insurance policyholders will see their margins pinched and will expect their PI broker to search the market to provide fair value at renewal in 2023.   It is interesting that the equity markets have stayed pretty much flat over the past few years and have bounced back after the initial drop in equity prices in the spring of 2020.

2. How are these market conditions likely to impact new entrants to the market?

Some new entrants to the market in 2023 will not have the legacy tail that current insurers live with, so there is a significant chance that there might be a “dash for cash” where new entrants will undercut existing market pricing with the logic that they can sit on cash for some years as their liability tails lengthens. Negligence claims can take up to five years to settle/close. Complex claims can take even longer with the costs of mediation and eventually litigation in the Courts. Investment income will become an important tool in return on capital.

Lloyd’s of London has posted some attractive numbers recently so the worst underwriting years of 2016, 2017 and 2018 are clearly behind the market now.

3. What would the impact of a prolonged economic recession be on the development of this market?

Should the UK suffer from a prolonged recession, history tells us that negligent litigation follows but there is usually a time lag before the tail catches up with the dog. At MGB we monitor claims triangulations closely. So as far as MGB is concerned, we see nothing unusual now.

4. Where does trading in the PI market stand going into 2023?

The Lloyd’s & London marketplace is back to pre-pandemic normal trading (face-to-face) and the market’s 334-year-old history is getting back to some form of normality. The frozen marketplace of 2020 and 2021 is over as we see people coming together again to discuss risk transfer.

5. What changes can policyholders coming to the market expect to see?

Policyholders who come to the market and purchase Cat towers of £100 million to £200 million protection are unlikely to see much price change in the market but there will be competition at SME firms where there is Primary capacity competition and abundance of Excess of Loss capacity.

With two or three profitable underwriting years behind us, it is hard to see why the UK PI market would not turn a softer in 2023 but one thing we can be certain of is the economic uncertainty we all face.

At MGB, we do everything we can to keep our customers informed on all market developments and MGB remains a leading PI market maker.

You can find out more about MGB and how it continues to build enduring relationships with clients, broker partners and insurers here

Source

However, armed with knowledge gleaned from a ten-minute segment on NBC, I had other ideas. The programme had highlighted how modern sustainable development techniques hugely reduced the risk of hurricane damage. If we are to gather a pool of federal money, why use it to maintain an artificial insurance market? Surely better to use the funds to incentivise building back better. Because the main impediment to people doing that is the cost, but if they did build more resilient homes the private insurance market would return as the risk would be so much better mitigated.

And then, back on home turf and in conversation with my former chair-turned-climate-guru, Richard Dudley, I was provided with the evidence that really makes my case: Babcock Ranch. Babcock Ranch, America’s first solar-powered town, is 12 miles northeast of Fort Myers – and so took the full brunt of Ian. But it is a purpose-built sustainable community. It has a 700-pane solar array just outside the 2,000-person community which provides more electricity than its residents use. The streets are designed to flood so houses won’t. Builders have used native landscaping techniques that both look nice but also control storm waters. And they have buried all the cables. The net result of this inbuilt climate resilience was that the town had not one second of outage during the hurricane – despite 2.6 million people losing power all around it. The only damage was a couple of uprooted trees. The town stood in the way of a category 5 hurricane and barely chipped a toenail. It is living proof that sustainable development could be the future for Florida and for the insurance sector.

The one thing Press reports on Babcock Ranch are pretty coy about is how much it all cost. But I feel confident in asserting that the answer to that question is “quite a lot” and probably out of the reach of a section of civilians. So, I return to my earlier point. Given what it has proven to be possible, surely public money would be best spent subsidising the creation of many more Babcock Ranches than propping up the insurance of legacy properties. It is a classic prevention-not-cure investment decision. And this is not just about public money. How can we as an industry incentivise this sort of sustainable development? Because it is in our interests, too, that these sorts of communities proliferate.

To give some context to this conundrum, take a look at the report the McKell Institute produced for Insurance Commission of Australia. This shows that during 2005–2022, the Australian government spent AU$24 billion on disaster relief but only AU$0.51 billion on building disaster resilience. Which seems sort of, to use the technical term, nuts. Surely, redressing the balance between these two figures could deliver a lower overall total?

So, I returned from Colorado a resilience disciple. It is further proof that our business is risk management consultancy and only, in part, the insurance of risks that can’t be mitigated in better ways. To paraphrase Che Guevara, what we need to build is two, three, a million Babcock Ranches. The future of our industry and the future of society demand it.

Source

How can reputational risk impact organisations?

“There are lots of different ways that reputational impact can affect an organisation, particularly as we see more and more companies are being valued by their brands,” he said. “And that can be very interpretational and can swing to huge degrees of volatility, far greater than that experienced in the past.”

In terms of market value, if you think about the top 10 companies of 20 or even just 10 years ago, they were heavily in the manufacturing/physical product space, he said, whereas now the top 10 are dominated by firms with heavily intangible assets. And while the risk of reputational harm is sitting high on the risk register of lots of C-suite leaders, many of them don’t yet understand how to combat or reduce their exposure – or how mechanisms such as insurance can help remove some of their risk exposure.

While brand reputation has always been a central factor in a business’s success, its value as an intangible asset – particularly in the context of a world that disseminates good and bad news alike so rapidly via social media – has come into its own. And so, the role of insurance in creating the right products and services to go alongside that evolving significance is more critical than ever.

The changing nature of reputational risk insurance

Edwards highlighted that, traditionally, reputational risk (or brand rehabilitation or crisis management) insurance was not bought in isolation.

“It’s historically been an add-on to more traditional products,” he said. “Where you’d typically see a sub-limit or an additional bolt-on providing a company with limited indemnity or limited support around a breach at an intangible level.”

The shift in the value of intangible assets as a key measure of a business’s share price has focused minds on the risk of reputational damage – whether that’s hands-on harm caused by the business itself, or inadvertent damage through their industry or association with an impacted brand. This damage can now have a far greater impact on a firm’s share price and ultimately its business value, he said, and it’s an evolution that is leading businesses to ask more of their insurance providers.

For LSM the answer to this evolving need has been to go one step further than creating a solution that matches the most pressing needs of clients, to develop an offering that is always a step ahead of where the winds of reputational harm are blowing.

“For us, for example, we’re looking at broader impacts like how companies can be affected by association with celebrity endorsements,” he said. “It’s a real gap when you think about some recent high-profile examples and how their associated brands which they endorse have reacted one way or another, either ending the relationship or continuing to use the individual(s) for future campaigns.”

The changing spectre of celebrity endorsements

Adaptability is built into the very core of LSM’s reputational risk insurance offering, he said, because the insurer recognises that reputational risk is not a binary matter, but a complex and delicate consideration that can appear to belie prediction. The product can’t afford to be overly restrictive about the brands that clients endorse, because high-profile modern celebrities have proven that even quite shocking associations can help sell a brand.

“So, more and more companies do associate themselves with [brands or individuals] who historically, from an underwriting lens, you’d think would surely have the largest claims possible,” he said. “But in truth, actually, because it’s a known substance with regards to how they’ve risen to publicity and maintained themselves at such a high level, it takes quite a lot to shock an audience.

“So sometimes, those which have a very clean bill of health as a celebrity endorser can be the ones that create the greatest challenge when either historic events are discovered or profile raised, or alternatively when they are involved in something that is against people’s perception of them. The big balance that we have to find is between the known risk and the unknown risk.”

Liberty’s reputational risk insurance offering is highly in-tune with the tide of public opinion, Edwards said, because it works so actively with a range of partners to perform horizon scans for companies that measure their risk exposures. LSM’s reputational crisis product supports clients in both understanding and managing this risk through insurance risk transfer, real-time reputational data analysis and industry-specific crisis and brand rehabilitation consultancy services.

The role of data insights in mitigating reputational risk

In order to supply its clients with the reputation intelligence necessary to help mitigate their risk, LSM’s underwriting team has partnered with Polecat Intelligence – an insurtech which has built an algorithm offering significant horizon scanning across both traditional media and social media to generate advanced data insights. This multi-lingual tool can even dig into even bespoke industry publications, he said, as well as monitor social media content.

Built into the algorithm is the creation of a sentiment and taxometry scale, he said, where the LSM team can measure discourse around a certain topic – whether that’s by the volume of its audience or the frequency with which a certain company or specific keywords are being used. There are a number of different metrics which are used to create a ‘horizon score’ and a ‘sentiment score’ which is then sense-checked against the industry sector in which the client operates. This allows the score to be benchmarked against a client’s true peers in the market.

All the information utilised by LSM is publicly available, he said, but Polecat pulls it all together to form “one version of the truth“. This then allows clients to be deliberate in managing their reputational risk exposures rather than taking a scattergun approach to determining their next steps whether that’s to do with marketing campaigns, limiting the damage of a reputational crisis or looking to change the way they’re viewed in their marketplace.  

“While the LSM product solution is still in its infancy, we see the use of these tools becoming more critical,” he said. “This is a problem that is not new but it’s growing at its fastest pace in terms of becoming more critical to the valuation of a business. At the same time, a lot of companies have yet to get a handle on how they can de-risk themselves nor what tools are available to support such understanding.

“For companies which have started to try to address and understand their exposures, we have many now looking at these types of products as being critical. More and more [these businesses] are looking at their reputation exposure as a business-critical insurance risk transfer purchase, in the same vein as liability cover, or traditional tangible property coverage.”

Source

How the Sterling Cup came to be

Revealing how the Sterling Cup first came about, Cook shared that in October 2018 his wife was diagnosed with cancer. It was while his family was struggling through the diagnosis, treatment and recovery, that the support and care of these charities really came to the fore. Having access to the services provided by these charities went such a long way to keeping his own stress levels manageable, he said, while he was caring for their three young children – to say nothing of the care shown to his wife.

“It was unbelievable, and I’ll never forget it,” he said. “So, there is for me a massive driver to give back. Because without people like us giving those UK charities money and support, then they won’t be able to give these treatments to others.”

Cook’s wife had already started treatment for her cancer when Archie Wilks – whose father Simon Wilks works at Sterling Insurance – was diagnosed with neuroblastoma in January 2019. When his wife had been given the all-clear, he said, he turned his mind to what could be done to raise money for his colleague’s child to go to the US and receive the treatment required to help prevent his cancer from returning.

“There are lots of cake sales, football tournaments, etc. going on to raise money,” he said. “But where the Sterling Cup came together was when I went to our board of directors and asked if there was any chance that I could hold a charity golf day – and whether there were any funds available to get that started. I’ve always been an organiser throughout my life with friends and family and so on, but to hold something of this scale with people from all across the industry was quite the challenge!”

To get started, he enlisted the help of good friends in the industry, Rod Wellard and Paul Copeland, who both know a lot of people in the industry and were keen to help in any way. They got some teams together and started getting people involved, he said, and then it occurred to them that it would be a great idea to pit the teams against each other in a Ryder Cup format that would see them competing to win a replica of the Ryder Cup.

An all-inclusive insurance industry initiative

“From the beginning I wanted this to be an industry event where anyone who wanted could come along as long as they paid the entry fee,” he said. “We don’t care who turns up, which has been great because we’ve had rival brokers turn up, people from insurance companies, etc. For us, this is about if you’re in the industry and you’re aware of this and you want to come along, then great. Come along and join us for a great day of golf and have the chance to chat with other brokers and other insurers.”

The success of the inaugural event led to the planning of 2022’s day – which got off to a great start with the news that Archie Wilks is now in full remission after 42 months of care. Almost 70 golfers from across the sector came together on the day itself, forming 17 teams, he said, and the atmosphere of the event was absolutely electric.  

“You can only really judge the success of it by the fact that so many people came back that we increased the teams from 13 to 17, without any problem,” he said. “We filled those spaces without too much rallying around – and the feedback that we got from people who attended was thanking us for a great event and saying they’d be back next year…

“The real judge will be the success of future years as well. If people keep coming back and keep enjoying it then we’re doing something right… And it’s great to see the profession come together because it’s maybe not the most elite golf course in the country. So, for people to come and play who are used to the highest-calibre of golf courses is really confirmation that they’re coming for the right reasons – to enjoy themselves in good company and support a great cause.”

Of course, all of this is made possible by a combination of people being willing to give up their time and of companies being willing to throw their weight behind important causes, Cook said. With that in mind, he paid special tribute to this year’s sponsors – with special thanks to Intelligent Vehicle Services (gold sponsorship), Strategic Insurance Services (silver) and Auxillis (bronze).

Teeing up for 2023

Two years into the high-stress planning that these events take hasn’t dampened Cook’s penchant for organising and the date of September 14, 2023, is already in the diary for the next Sterling Cup.

“So that’s in the calendar and God willing, we’ll all be heading across to the Manor of Groves at Sawbridgeworth and getting out on the course again,” he said. “So, hopefully, we’ll continue to build momentum and attract sponsors – we had 13 sponsors this year and could do with about 18 sponsors for next year.”

Those looking to register a team can do so through the dedicated Sterling Cup webpage, he said, or alternatively, reach out to him through LinkedIn for more information. For those looking for a reason to get involved, he suggested they look at the Facebook page ‘Archie’s Journey’ which shares his progress to date.

“When you see those pictures, and you see his face, and you see him and the family in America, you understand it all,” he said. “The [Wilks’ family] got to take some time in Disneyland recently and seeing him having breakfast with Minnie Mouse and Mickey Mouse and the rest, for me, just makes all the stress and anxiety and sleepless nights that go into arranging something of this scale absolutely worth it.”

If you would like to get involved with the 2023 Sterling Cup tournament, you can sign up today. Did you attend the 2022 event? If so, let us know how it went in the comments below.

Source

Tesla first announced the fully-electric Semi back in 2017, promising ‘The Future of Trucking’. It was supposed to be in production in 2019, but the program suffered repeated delays, including pandemic-driven supply chain issues.

On the Tesla website, details of the Semi are sparse. Apparently, the truck can accelerate from 0-100km/h in 25 seconds, fully loaded, and maintain highway-level speeds even up steep grades. It can also travel up to 800km on a single charge (allegedly proven in the successful test run), using less than 1.25kWh per kilometre of energy consumption.

Tesla team just completed a 500 mile drive with a Tesla Semi weighing in at 81,000 lbs!

— Elon Musk (@elonmusk) November 27, 2022

According to the Tesla website, the Semi truck also comes with “active safety features that pair with advanced motor and brake controls to deliver traction and stability in all conditions”.

The future of trucking

Pushing the noise and speculation around this Tesla product release aside, I’m excited about the “Future of Trucking” promise sold with the Semi because – as any commercial transportation insurer or broker will know – the industry is in desperate need of change.

The commercial transportation sector has long been on a bumpy road. In the years leading up to the COVID-19 pandemic, the industry was plagued with challenges around distracted driving, a general increase in auto claim costs due to new technology, and a rise in catastrophic liability claims driven by social inflation and nuclear jury verdicts (particularly in the United States, but the trends are true in other major trucking economies).

Today, the industry can add a few more challenges to the list, such as inflation and soaring gas prices, the ever-growing driver shortage, and supply chain delays, which are adding pressure to delivery schedules, and increasing the cost and time it takes to complete truck repairs.

Facing such challenges, commercial transportation insurance loss ratios have deteriorated, and as a result, most insurers have raised rates for both primary and excess/umbrella coverage, while also limiting capacity and applying strict risk selection and underwriting criteria … so, you can add insurance woes on top of that list above.

Is Tesla’s Semi the answer to all of those industry problems? Maybe not, but electric trucking, in general, could mitigate some of the core challenges … but not without introducing some new exposures.

Advanced in-cab safety technology – the likes of which Tesla claims to have included in the Semi – could help to reduce collisions, potentially even those tied to distracted driving or driver fatigue, which should (in theory) reduce auto insurance claims costs and eventually premiums.

For years, transportation insurers have tried to accentuate the importance of technologies like dash-cams and telematics to promote safer driving, but it has been a struggle getting truckers to engage. If these tools are already built into trucks, there should be an automatic positive feedback loop.

Having electric trucks with the ability to maintain highway-level speeds, even up steep grades, should also help to reduce crash frequency, as trucks would be able to share the road better with other vehicles.

But while frequency might go down, it remains to be seen what will happen to crash severity, especially if these electric trucks are far more expensive to purchase and repair. ENGS Commercial Finance Co. reported that the cost of buying an all-electric semi-truck is between 10% and 80% more than a comparable diesel truck, before rebates. This could result in higher loss severity in the event of an accident.

Energy challenges

Innovation always comes with its challenges. I personally think electric cars and trucks are amazing, and they’re an important step in the global race to net-zero carbon emissions – although they’re too expensive (at present) for the average consumer.

But nothing is ever 100% awesome. A Bloomberg article earlier this month, entitled ‘Electric Truck Stops Will Need as Much Power as a Small Town,’ cited a new study of highway charging requirements conducted by National Grid Plc. Researchers found that by 2030, electrifying a typical highway gas station will require as much power as a professional sports stadium—and that’s mostly just for electric cars. The projected power needs for a big truck stop are expected to equal that of a small town by 2035.

That’s a very dramatic increase in demand for power, which utility providers may struggle to match. The success and efficiency of electric transportation is heavily dependent upon energy infrastructure and the capacity of electrical grids. Some places, such as California – a very pro-electric vehicle state – are already struggling.

Californian officials have warned that extreme heat and other climate change impacts will threaten the reliability of the state’s electrical grid over the next five years, potentially causing electricity blackouts due to power supply shortages. Well, what happens when an electric truck carrying essential goods can’t reach its destination in time because it is unable to recharge?

In some countries, like the US, Canada, and Australia, the distances that truckers travel are immense. The infrastructure required to maintain electric fleets across areas of such enormous scale is not there yet – and based on the roll-out of electric vehicles for personal use – it will take some time for the necessary developments to take place.

I consider the Tesla Semi release as an exciting development in the trucking industry. It’s certainly positive for commercial transportation insurers and brokers, but, like all innovation, the rise of electric trucking will inevitably come with new exposures and insurance challenges.

Will electric trucks have a positive impact on the commercial transportation insurance market? Share your thoughts in the comments below.

Source

As part of the deal, Flint Insurance will become a GRP retail hub, with its 126 employees – including vendors Darren and David Taylor – remaining in the business. It will also continue to trade under its brand and operate out of its Orpington and Chelmsford offices.

Flint Insurance managing director Darren Taylor commented that the company had tremendous success as an independent broker. However, becoming a part of GRP – including Brown & Brown’s capabilities and investment – was compelling.

“We started talking to GRP some time ago, and while there were attractions to their private equity backing, once they had secured their ‘forever’ platform and we had a chance to meet the team who lead Brown & Brown, it was an easy decision,” Taylor said. “We have seen how the GRP businesses have grown to a new level of success as part of the wider group, and we are looking forward to further accelerating our exciting growth plans with owners who share our customer and employee-focused culture, including staff share ownership.

“The firepower that GRP and Brown & Brown can provide for growth-oriented businesses like ours is second to none in the market. Our clients and the Flint family – our fantastic team of people – will equally benefit from the wider range of products and services we can call on as part of a bigger group.”

GRP group CEO Mike Bruce hailed the latest acquisition, which has already received regulatory approval, as a significant milestone for the company.

“This acquisition underlines our continued appetite, despite the uncertain economic environment, for larger businesses that meet our strict quality criteria and are culturally and strategically aligned with us,” he said.  “Flint Group is a brilliantly run brokerage with highly entrepreneurial owner-managers in Darren, David, and their team, who will all fit superbly into our wider group. We look forward to supporting them as they begin the next stage of their successful journey as part of the GRP/Brown & Brown team.

“This acquisition underlines our determination to continue to grow our UK retail business division, utilising our hub and spoke strategy.”

Flint Insurance’s acquisition follows GRP-owned health insurance intermediary Premier Choice Healthcare’s dual deal earlier this month.

Source

What springs to your mind when you are asked to imagine a ‘typical’ hacker? For many, it’s a picture that has changed substantially in recent years – with the image of a hoodie-clad youth sitting alone in their room gradually being overlaid by market reports of highly sophisticated and well-structured organisations boasting teams of threat actors.

Find out more: Discover how Altus’ team can help you navigate today’s ever-shifting cyber landscape

However, as tempting as it can be to shift from one narrative to another, as with so much around cyber, the picture of the online threat actor landscape is more nuanced than any simple interpretation. This nuance comes back to the message central to the work that Aaron Cain (pictured) and his team at Altus are doing – creating accessible discussions around cyber risk without falling into the trap of assumptions and oversimplification.

Looking at the current risk landscape, Cain – a cyber security consultant with Altus – highlighted that cyber criminals, with exceptions, can generally be sorted into three categories. The first of these are state actors often assumed to be located in North Korea, Russia, several locations in the Middle East, or China. These are intelligent individuals who have been given a way out of poverty or into a better life than would otherwise be available to them.

“Nation-state groups create various pieces of malware – for instance, the WannaCry [malware] – that cyber specialists researched and saw it had North Korea’s or Russia’s or somewhere else’s fingerprints on it and thus could be identified as a state-sponsored attack,” he said. “So, states bring out something and it hurts their adversary’s marketplace and has an impact. However, once that impact is mitigated, they then take that packet of software and put it on to the dark web version of GitHub.

“The next category of hackers are those located anywhere in the world who then acquire that particular piece of malware. Where the nations have been using it at the state level, individuals can now use it at that next level – which is targeting corporations, small businesses, etc. They add their own wrappers, and if they’re smart enough, sometimes they recode it. In many cases, it comes with a complete operating manual on how to deploy it and how to get your payment out. ”

Cain noted that what makes this category of threat so daunting is that, with an internet connection and nothing else to do with their day, these hackers can be tireless in chasing one exposed prospect after the other. They’re not sophisticated, he said, but they don’t have to be because they’re using services somebody else has put together to relentlessly scan for any weakness in a business’s infrastructure.

Further compounding the issue is when the code becomes ‘Ransomware as a Service’ with hacking consortiums supporting users in these deprived areas. They invite successful hackers to join the business, he said, offering a monthly salary, skills upgrades, and English lessons among other perks. Having teams of such individuals hitting and re-hitting targets until something gives is still how a lot of cyberattacks are getting through.

“And are we going to put them in jail?” he asked. “We can find them, but even if we find them and pin down what it is they’re doing, what can we do? Absolutely nothing, because they’re in countries that don’t allow us to… So, when you’re dealing with that level of threat, you’re dealing with the major growth of the problem – like dust at the bottom of a cloud that just spreads and spreads.”

Read more: A shifting paradigm – how digital transformation is creating new cyber risk exposures

Considering the third category of risk, he said, corporations find themselves dealing with hacktivists – people who are morally outraged with an organisation and are looking for a way to do it damage. Traditionally, Cain said, the easiest way to hurt a company doing something you don’t like was to take its money away. Ransomware and denial of service attacks were the most popular way to do this, hitting a company financially while also doing reputational harm and raising the profile of the hacktivist’s cause.

“However, it’s a changing world,” he said, “and people have started to realise that even if I do get through, all that really gets affected is [my target’s] insurance. The attack is paid for, systems and services are restored, and it hasn’t really done what I wanted it to do. So, ransomware is starting to evolve into new threats like wiperware. Basically, instead of going in and encrypting systems, they’re deleting things, so you end up with machines with no data, no operating system and nothing left.

“And if they can find it, they will go after your backups as well so you can’t restore that data. This at least stops the organisation from doing whatever evil they perceive it’s doing for an indeterminate period of time until it’s brought back online. Additionally, it raises the visibility of their cause.”

This category of cyber risk represents a huge hazard in the context of nuclear power stations and worldwide supply chains. This kind of attack and attacker deals with more idealistic, siloed thinking, he said, which creates new sets of problems that cannot be met with a ransom payment.

An interesting combination of the types of threats is being exacerbated by the ongoing war in Ukraine. Up until this point, he said, the general populace in Russia has been able to almost shrug off the sanctions which have targeted the oligarchs first and foremost. However, as time goes by, there is increased financial motivation behind the government stepping up their cyber game.

“They’ve done a fair bit of damage in cyber,” he said. “In my opinion, they’ve been rather clumsy about it – their hacks haven’t had the sophistication that we see from other nation state actors, for instance… but they’re getting better, they’re sharpening up and they’re realising they can make up that lost ground. Along the way, they can trigger hacktivism with their mindset that any damage they do to the West is to their benefit.”

With so much cyber risk to balance simultaneously, it’s no wonder that companies are looking for any and every opportunity to mitigate their chance of being attacked but Cain highlighted that, unfortunately, you can’t afford just to focus on prevention. Everybody will be hit at some point in time, he said, and so the focus needs to also be on damage limitation.

The most frightening element of the shifting paradigm of cyber threats and cyber threat actors is now that wiperware concept, he said, as for every second in which that attack goes unnoticed or is not shut down, critical information and systems are being deleted or rendered unusable. With that in mind, Altus is changing the conversation around this threat by recommending segmentation and isolation of clients’ systems.

Traditionally, he noted that cyber security reviews acquire vast amounts of data about an organisation, regardless of whether it’s a small company, a big organisation or a government entity. Approaching every engagement in the same manner is the carpenter’s syndrome, he said, “where everything’s a nail because I’ve got a hammer”.

What Altus has recognised is that while cyber security needs those components, it also needs to know bespoke, mission-critical information such as where sensitive customer data is held, where financial data is kept, where third-party information is stored and where the control layer for all your IoT devices is located.

“We separate those out,” he said. “Part of what we’re looking at is that network segmentation so that when somebody gets in… a compromised account within the network only has a limited amount of information that they can see. [The hacker] can’t move from one segment to the other, because we’ve put that separation in place.”

“We’re [moving with the market] towards ‘zero trust architecture’ where if somebody’s in and trying to escalate to higher authority, they have to validate and revalidate over again to break out of the channel that they’re in. So, we’re containing and limiting the damage that’s being done because as long as they can’t get data out, then they’re restricted to the damage that can be done within that segment.”

Read more: Altus’ Aaron Cain on creating a culture of ownership around cyber risk

To get to a place where this approach is the new normal for cyber security will take significant collaboration, he said, and Altus is committed to fostering that collaboration.

“We’re willing to invest our time, our help and our experience into these environments to make everybody safer and systems much more defendable,” he said. “Because we know that then when somebody is not prepared for something, we can help with programme delivery or if you’re already there with a tabletop exercise or assessments to prove what you’ve done is effective.

“The key thing is that if the market is stronger and sounder, then we’re not seeing huge amounts of money lost to individual hackers and collectives. Everybody at Altus  knows that having these conversations educates the market – and an educated consumer is a better consumer.”

Find out more: Discover how Altus’ team can help you navigate today’s ever-shifting cyber landscape

With over four decades of experience in multiple market verticals, Aaron Cain has worked to integrate and secure business critical information flows across technology stacks ranging from legacy systems to cloud computing.

During years of independent consulting assignments based in the UK and EU, Aaron has developed the ability to frame complex technical and security concepts in concise and clear business terminology. Leveraging his experience with banking, hedge fund and insurance clients, Aaron will be working within Altus to develop specialised cyber security solutions and programmes for the financial services marketplace.

Source

Opening keynote speaker Mandy Hickson, a former RAF Fast-jet Pilot, started off Insurance Business UK’s 2022 ‘Women in Insurance Conference’ on a strong footing. Sharing her experiences flying multi-million-pound jets for the RAF and as the only woman pilot on her Front Line Tornado Squadron, Hickson emphasised the critical need to surround yourself with the right team in order to succeed and thrive, whatever your career path.

“As I’m talking,” she said, “I want you to reflect and think on who are your wingpeople? Those people that you know have got your back. Some of them may well be in the room with you today, but others might be colleagues – because it’s those relationships that are ones that make all the difference to us, leading us to high performance.”

Hickson’s keynote discussion set the tone for the day which was in itself a celebration of networking, effective leadership, and the creativity and diversity of experience that so many women bring to the insurance ecosystem. Panel discussions featuring some of the insurance profession’s most respected leaders – among them the likes of Lisa Bartlett, Sian Fisher, Jason Groves and Sheila Cameron – touched on a range of topics from ‘Personal brand and your leadership’ to ‘Lessons learned from a multigenerational workforce’.

This being the first WII Conference I have had the pleasure of attending in-person since joining Insurance Business, I was struck by the enthusiasm of the speakers and the audience alike, and the willingness of everybody assembled to engage with the full raft of topics on discussion. Throughout the day and into the late afternoon, it was remarkable to see just how much there was left to say – not to mention to do – when it comes to diversity, equity and inclusion in insurance.

Read more: LMA CEO Sheila Cameron on the two secrets to a successful business

The power of passion was a key takeaway from the conference. To hear such talented, enthusiastic and compelling women and men discussing their experiences within the insurance sector was something of a revelation. There are so many conversations about the power of passion but it’s only when you get an opportunity to see these playing out in real-time that you can truly appreciate the deep and abiding connections that underpin so many insurance relationships.

Whether discussing the paradox of flexibility and exposure in this new working environment or how to make a positive, lasting impression in the workplace – passion stood out as the key ingredient among each of the speakers. And to see it in action really was to see the insurance profession at its finest.

Another takeaway for me was realising the sheer variety of voices that can be heard across the insurance market – when they’re given a platform to speak. The wealth of insight generated from the diversity of backgrounds, routes into the market and differing experiences of a career in insurance is extraordinary to see.

Read more: How to have the difficult conversations around diversity and inclusion

And far from limiting themselves to the broad-strokes questions around gender, age and race – these voices touched on topics including everything from neurodiversity, engaging with introverted talent and developing emotional intelligence.

Of course, hearing these insights also begs the question of who else are we not yet hearing? Who else doesn’t have a seat at the table but would be able to further educate and inform us about topics beyond our realm of experience if they did? The conference was, in essence, an invitation to think bigger and broader about DE&I and to engage with it not as a destination to reach but as a road to keep travelling.

Did you attend the Women in Insurance 2022 Conference? Please feel free to share your comments or insights below.

Source