Higher Education

Higher Ed’s Cyber Threat

Universities that want to stay eligible for federal grants better get their cyber-risk house in order.
By: | August 29, 2017 • 5 min read

Oh, for the days when university security meant cautioning administrators to lock their offices at night and preparing campus police for perimeter breaches at Friday night football games.

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All that has changed, of course, with broad open-access computer platforms online and cyber threats coming from all sides — threats that crystalized for Heidi Wachs following two data breaches in 2007.

“One was the first time I got a notification telling me that my information had been compromised,” said the privacy expert and member of Jenner and Block’s Privacy and Information Governance Practice in Chicago. “And shortly after I joined Georgetown University, they experienced their own data breach, theft of hardware, and I had to put all of the things I had learned into practice.”

E-mail breaches and stolen laptops haven’t gone away, Wachs added, but the number of attack sectors has expanded, notably to newer threats such as phishing, ransomware and misuse of insider electronic privileges.

In fact, the data breaches universities must contend with daily are really no different than those confronting manufacturers, suppliers and their customers, said Wachs. But she added that a university is more complex than many businesses because it has a broader customer base than just students, staff and faculty.

Heidi Wachs, special counsel, Privacy and Information Governance Practice, Jenner and Block

“Lots of universities open their doors to the communities they are located in to provide services — for example, their libraries. And sometime universities own and operate their own hospitals, so you’re dealing with health information as well.”

That fact became painfully evident in Verizon’s 2017 Data Breach Report. This year, major universities including Georgetown and Oklahoma harvested the dubious distinction of seeing their crests hung on the Department of Health and Human Services’ “wall of shame” for e-mail breaches.

E-mail breaches represent one of the two largest cyber threats on campus, the report noted. The other: malignant spyware surreptitiously slipped into open access platforms used by students, faculty and researchers.

Compliance Is Complicated

It’s not as if these universities haven’t had adequate warning. In 2000, the Federal Trade Commission enacted a “Safeguards Rule” requiring all institutions providing financial products or services, including universities, to create a comprehensive Written Information Security Program (WISP) aimed at identifying and lowering the risk of cyber attack.

“The cyber criminals are a little bit ahead of the cyber defenses. And everybody is struggling with it.”  —Nick Economidis, underwriter, Beazley Group

But universities and colleges were slow to embrace the WISP standards, said Michael Corn, Chief information Security Officer (CISO) at the University of California, San Diego, because of standards considered far more robust under the National Institute of Standards and Technology (NIST).

For example, by December of this year, some federal grants will be subject to the NIST 800-171 standard requiring universities to safeguard unclassified as well as classified information from cyber intrusions.

“Every university I know is figuring out how we’re going to comply with it because it raises the bar considerably on security practices,” said Corn. “And compliance is a condition of receiving those grants from the government.”

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Despite reported concerns that cyber insurance might not be available to colleges and universities not in compliance with WISP, Corn said that appears not be a problem under NIST.

“My suspicion is that the insurers are asking more detailed questions than they used to,” he said.

Those questions will center around each university’s risk profile and be manifested in cyber liability policies “that are akin to a cafeteria-style menu where you can pick and choose from different kinds of coverages,” said Jan Larson, partner in Jenner and Block’s Insurance Recovery and Counseling Practice in Washington, D.C.

This includes third party litigation loss, but also “things on the other side of the spectrum such as cyber extortion,” said Larson, “where you have someone threatening the university from outside holding your data hostage, for example.”

First party costs, such as those accrued notifying everyone potentially affected that a cyber breach has occurred, can be “a tricky art,” said Nick Economidis, an underwriter at Beazley Group and a specialist in technology risk.

Nick Economidis, underwriter, Beazley Group

He cites the example of a small college which sent out a notification of a cyber breach to faculty and employees, only to have a staff of three on the help desk flooded with phone calls.

“What we did is parachute in a call center to take those calls off the help desk,” said Economidis.

But he said other threats are even harder to master alone, like getting the key to unlock ransomware holding your data hostage.

“We won’t tell you to pay,” said Economidis. “That’s your decision.”

But insureds can tap into the experience of insurers and brokers who’ve dealt with similar crises for other clients.

Based on the look and feel of the ransomware, they may be able to help narrow down suspects suggest whether that hacker or group has made good on past promises to turn over the key after the ransom has been paid.

“Decisions become a lot easier when you have that type of information.”

Insurance programs can also help colleges access cyber forensic experts and crisis communications experts to formulate a media response to a well-publicized breach.

Grading University Response

So how are universities doing in these days of the WannaCry ransomware and other cyber intrusions? Very well, thank-you, said Mary Ann Blair, director of information security at Carnegie Mellon University.

Despite the volume of malware, hacking and other cyber attacks, “everyone is upping their game.” That includes specific units within universities researching and applying security controls.

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“But we’re also seeing that the data provider is specifying more what that menu of security controls must look like before they provide the data. So this is a case where everybody is responding to everyone else in the face of a threat.”

University of Texas CISO Helen Mohrmann believes colleges have started to pay attention to connected objects like vehicles and buildings embedded with software, and sensors enabling those objects to collect and exchange data.

“But we need to put an increasing amount of focus on it,” she said, “as do the vendors who produce these types of devices and those who provide networks and other security tools. It has to be a partnership.”

Economidis believes universities are doing a very good job securing their systems from cyber attack. But they’re also a microcosm of the core challenge facing the entire nation.

“The cyber criminals are a little bit ahead of the cyber defenses. And everybody is struggling with it,” said Economidis.

The task at the university level and elsewhere: to balance the need for controls aimed at thwarting cyber criminals, “while not infringing upon the freedoms we enjoy.” &

David Godkin is a freelance magazine writer based in Toronto. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]