The Insurance Business America’s Broker Connect virtual event on cyber issues is set to be held on Tuesday, June 9 and will include a discussion by a leading panel of experts on cyber risks and the trends currently facing the insurance industry. While cyber liability insurance was already the fastest growing new sector in insurance in the world, COVID-19 placed a new emphasis on the new world of remote working, smartphones, the Internet of Things (IoT) and the risks and threats involved.
Speaking before the event, Ron Berg, executive director of Agents Council for Technology (ACT) and panelist at the event, discussed the specific type of cybercrime that relates to the vulnerabilities in mobile platforms, IoT and the impact on the homeowners industry as a whole.
While organizations are improving their operations by adopting ever-advancing technologies like mobile, cloud and IoT devices, cybercriminals have been hard at work combating these improvements. According to Berg, the latest identified cybercrime risks have revealed that hacking is leading the way with the finance and insurance sector rated the fourth highest attacked economic sector—10.5% of all exposures.
Cyber Liability and Homeowners Insurance
“Over the past four to five years we have seen the emergence of the mobile platform as the platform of choice,” Berg says. “Com-Score research indicates that 86% of insurance shopping begins on mobile platforms, so carriers, agents and technology professionals have to provide for the mobile platform. And now that more and more people are working from home during the pandemic, the increase in the use of technology at home has brought additional risks in terms of mobile and IoT devices.”
“Insurance agents need to be aware of the benefits and risks to homeowners and how to advise clients on the privacy and insecurities involved with that,” Berg says. “Agents and brokers need to be proactive in advising their customers. They need to look for opportunities, look at what individual risks are and look at what the carrier partners' palette has to offer.”
Smartphone and IoT Vulnerabilities
Remote access attacks are increasing in number and are becoming more and more sophisticated. Two billion data records were compromised in 2017, and more than 4.5 billion records were breached in the first half of 2018 alone, according to the European Business Review. “Overall, records lost are way up already in 2020—from 2.3 billion in 2019 overall to 8.5 billion already in the first quarter of 2020,” Berg says.
Hackers are targeting computers, smartphones, internet protocol (IP) cameras, and network attached devices that require external networks or the internet.
More than 60% of fraud online is accomplished through mobile platforms, according to RSA 2019 White Paper on Cybercrime, and 80% of mobile fraud is achieved through mobile apps instead of mobile web browsers. Increased security attacks on smartphones relate primarily to unsafe browsing practices with people accessing personal information outside the security of their own homes. These practices leave them open to phishing, spear phishing and malware attacks.
The consumer IoT industry is expected to grow to more than seven billion devices by the end of 2020, according to a Gartner report. Asked whether he thinks this level will be exceeded because of the increase in the number of people working from home, Berg says "there will definitely continue to be an expansion in the curve.“
However, the IoT provides opportunities for agents and insurers to offer product-service bundles to reduce the probability of damage and lower the overall risk for homeowners and insurers.
Homeowners benefit when agents analyze what the carriers have to offer in terms of protection, reduced premiums, and incentives offered, like a free Nest thermostat or a Ring™ Video Doorbell. “While agents are not cyber experts, they do understand there are underwriting implications for the use of advanced technologies and can provide advice, such as simply changing the password on a new router,” Berg says.
“There is no one technological advance that is completely secure,” Berg continues. “Agents understand what carriers have on offer and what consumers are looking for.” Going forward, the impact on personal lines will continue to affect how consumers purchase policies, how independent agents process them and how carriers deliver coverages.
Join the panel of experts on June 9 at Insurance Business America’s Broker Connect to learn more about the cyber risks and trends currently facing the insurance industry.
Olivia Overman is IA content editor.