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

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R&I Profile

Achieving Balance

XL Catlin’s Denise Balan stays calm and focused when faced with crisis.
By: | January 10, 2018 • 6 min read

In the high-stress scenario of kidnap or ransom, the first image that comes to mind isn’t necessarily a yoga mat — at least, not for most.

But Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin, who practices yoga every day, would swear by it.

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“I looked at these opposing aspects of my life,” she said. “Yoga is about focus, balance, clarity of intent. In a moment of stress, how do you respond? The more clarity and calmness you maintain, the better positioned you are to provide assistance in moments of crisis.

“Nobody wants to be speaking to a frenetic person when either dealing with a dangerous situation or planning for prevention of a situation,” she added.

“There’s a poem by [Rudyard] Kipling on that,” added Balan’s colleague Ben Tucker. “What it boils down to is: If you can remain calm, you can manage through a crisis a lot better.”

Tucker, who works side by side with Balan as head of U.S. terrorism and political violence, XL Catlin, has seen how yoga influences his colleague.

“The way Denise interacts with stakeholders in this process — she is very professional and calm in the approach she takes.”

Yin and Yang

Sometimes seemingly opposite or contrary forces may actually be complementary and interconnected. In Balan’s life, yoga and K&R have become her yin and yang.

She entered the insurance world after earning a juris doctor degree and practicing law for a few years. The switch came, she said, when Balan realized she wasn’t enjoying her time as a commercial litigator.

Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

In her new role, she was able to use her legal background to manage litigation at AIG, where her transition from law to insurance took place. She started her insurance career in the environmental sector.

In a chance meeting in 2007, Balan met with crisis management underwriters who told her about kidnap and ransom products.

She was hooked.

Because of her background in yoga, Balan liked the crisis management side of the job. Being able to bring the calmness and clearness of intent she practiced during yoga into assisting clients in planning for crisis management piqued her interest.

She then joined XL Catlin in July 2013, where she built the K&R team.

As she became more immersed in her field, Balan began to notice something: The principles she learned in yoga were the same principles ex-military and ex-law enforcement practiced when called to a K&R-related crisis.

She said, “They have a warrior mentality — focus, purpose, strength and logic — and I would say yoga is quite similar in discipline.”

“K&R responders have a warrior mentality — focus, purpose, strength and logic — and I would say yoga is quite similar in discipline.” — Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

Many understand yoga to be, in itself, one type of meditation, but yoga actually encompasses a group of physical, mental and spiritual practices. Each is a discipline. Some forms of yoga focus on movement and breathing, others focus on posture and technique. Some yoga is meant to relax the mind and create a sense of calmness; other yoga types make participants sweat.

After having her second child and working full-time, Balan wanted to find something physical and relaxing for herself; a friend suggested yoga. During her first lesson, Balan said she was enamored with it.

“I felt like I’d done it all my life.”

She dove into the philosophy of yoga, adopting the practice into her daily routine. Every morning, whether Balan is in her Long Island home or on a business trip, she pulls out her yoga mat to practice.

“I always travel with my mat,” she said. “Daily practice is the simplest form of connection to routine to maintain my balance — physically and mentally.”

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She said the strangest place she has ever practiced was in Lisbon. She was on a very narrow balcony with a bird feeder swarming with sparrows overhead.

After years of studying and practicing, Balan is considered a yogi — someone who is highly proficient in yoga. She attends annual retreats with her yoga group, where she is able to rejuvenate, ready to tackle any K&R event when she returns.

In 2016, Balan visited Tuscany, Italy, where she learned the practice of yoga nidra, a very deep form of meditation. It’s described as the “going-to-sleep stage” — a type of yoga that brings participants to a state of consciousness between waking and sleeping.

“It awakens a different part of your brain,” Balan commented. “Orally describing it doesn’t quite do it justice. One has to practice Nidra to fully understand the effect it has on your being.”

Keeping a level head during a crisis is key in their line of business, Tucker said. He can attest to the benefit of having a yogi on board.

“I’ve seen her run table-top exercises where there is this group of people in a room and they run an exercise, a simulation of a kidnap incident. Denise is very committed to what we’re doing,” said Tucker.

“She brings that energy. She doesn’t get flustered by much.”

Building a K&R Program

When Balan joined XL Catlin, she was tasked with creating the K&R team.

Balan during a retreat in Sicily, Italy, 2017

She spent time researching and analyzing what clients would want in their K&R coverage. What stuck out most to Balan was the fact that, in these situations, the decision to purchase kidnap and ransom cover is rarely made because of desire for reimbursement of money.

“I asked why people buy this type of coverage. The answer was for the security responders,” she said.

“These are the people who sit with the family. They’re similar to psychologists or priests,” Balan further explained. “Corporations can afford to pay ransom. They buy [K&R] because it gives them access to these trained and dedicated professionals who not only provide negotiation advice, but actually sit with a victim’s family, engaging deep levels of emotional investment.”

“I’ve learned to appreciate all moments in life — one at a time. The ability to think clearly and calmly guides my work, my practice and my personal life.” — Denise Balan, senior VP and head of U.S. kidnap & ransom, XL Catlin

Balan described these responders as people having total clarity of purpose, setting their intentions to resolve a crisis — a practice at the very heart of yoga. She knew XL Catlin’s new kidnap program would put stock in their responders.

“I’ve worked closely with the responders to better understand what they can do for our clientele. These are the people who run into danger — warrior hearts married to dedication to our clients’ best interests.”

But K&R is more than fast-paced crisis and quick thinking; Balan also spent a good deal of time writing the K&R form and getting the company’s resources in order. This was a huge task to tackle when creating the program from the ground up.

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“A lot of my day-to-day is speaking with brokers and finding ways to enhance our product,” she said.

After a few months, she was able to hire the company’s first K&R underwriter. From there, the program has grown. It’s left her feeling professionally rewarded.

“People don’t often get that opportunity to build something up from scratch,” she said. “It’s been an amazing experience — rewarding and fun.”

“She brings groups of people together,” said Tucker. “She’s created a positive environment.”

Balan’s yogi nature extends beyond the office walls, too. Her pride and joy, she said, are her kids. And while it may seem like two large parts of her life are opposite in nature, Balan’s achieved balance through her passions.

“[Yoga] has given me the ability to see beyond only one aspect of any situation” she said. “I’ve learned to appreciate all moments in life — one at a time. The ability to think clearly and calmly guides my work, my practice and my personal life.” &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]