An insurance provider in the EMEA region experienced every insurer’s worst nightmare in June 2018. Hackers illegally entered the company’s information-technology infrastructure, accessed customer emails and demanded ransom. News of this breach resulted in an immediate drop in the stock price of the company.

The public is seemingly inundated with news reports about organization across industries being hacked, and yet most organizations remain unprepared for cyber attacks. Only an estimated 10 percent of companies have cyber insurance today!

Cyber risk can be difficult to predict for businesses in any industry and organizations sometimes cover up incidents to protect their brand, which makes it difficult to understand the true scope of cyber crime. One thing is clear – insurers are in the crosshairs. They possess massive amounts of valuable and sensitive personal data from their customers –financial data, health-related details, credit card numbers, identification data and other information that could be exploited in the event of a cyber attack against an insurer.

In a world where cyber breaches can be paralyzing, the challenges facing insurers can seem daunting. With so many attacks already having crippled organizations around the world, there is great urgency for insurers to offer the right coverage for their customers and to protect themselves against future cyber attacks.

Defining Cyber Attacks and IoT Hacks

Cyber attacks occur when computer systems, technology-dependent enterprises and networks are exploited. Codes are inserted to change existing computer code, logic or data, which can lead to compromised data, and information and identity theft.

Cyber attacks on Internet of Things (IoT) devices carry potentially terrifying consequences. Several companies have already been hit by IoT-based cyber attacks. In July 2015, for example, Fiat Chrysler recalled 1.4 million vehicles after hackers were able to take control of a Jeep remotely, according to CNN. The hackers possessed the ability to prevent the vehicle from breaking, turn off the engine, steer the car off the road, and interfere with the vehicle’s electronics.

Cyber attacks also potentially threaten millions of homes, which concerns insurers that provide “smart home”/“connected home” products or packages. “Multiple vulnerabilities” were found in 50 commercially-available devices, including the remote opening of a door lock without a password, according to Symantec research.

Frighteningly, weak points were also discovered in a wide variety of medical devices, such as insulin pumps, x-ray systems and implantable defibrillators.

An international cyber risk report by NTT Data analyzed 6.2 billion attacks over a 12-month period, between October 2015 and September 2016. It stated that 73 percent of malware at organizations arrived via phishing attacks. The United States was attacked the most – 41 percent of all attacks.

For more information on the scope of cyber threats insurers are facing, please download Sapiens’ NEW white paper: Insurers in the Crosshairs: Winning the War Against Hackers.

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