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

Risk Management

The Profession

This senior risk manager values his role in helping Varian Medical Systems support research and technologies in the fight against cancer.
By: | September 12, 2017 • 5 min read

R&I: What was your first job?

When I was 15 years old I had a summer job working for the city of Plentywood, mowing grass in the parks and ballfields, emptying garbage cans, hauling waste to the dump, painting crosswalk lines.  A great job for a teenager but I thought getting a college degree and working in an air-conditioned office would be a good plan long term.

R&I: How did you come to work in risk management?

I was enrolled in the University of Montana as a general business student, and I wanted to declare a more specialized major during my sophomore year. I was working for my dad at his insurance agency over the summer, and taking new agent training coursework on property/casualty risks in my spare time, so I had an appreciation for insurance. My dad suggested I research risk management for a career, and I transferred sight unseen to the University of Georgia to enroll in their risk management program. I did an internship as a senior with the risk management department at Sulzer Medica, and they offered me a full time job.

R&I: What could the risk management community be doing a better job of?

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We need to do a better job of saying yes. We tend to want to say no to many risks, but there are upside benefits to some risks. If we initiate a collaborative exercise with the risk owners — people who may have unique knowledge about that particular risk — and include a cross section of people from other corporate functions, you can do an effective job of taking the risk apart to analyze it, figure out a way to manage that exposure, and then reap the upside benefits while reducing the downside exposure. That can be done with new products and new service offerings, when there isn’t coverage available for a risk. It’s asking, is there anything we can do to reduce the risk without transferring it?

R&I: What emerging commercial risk most concerns you?

Cyber liability. There’s so much at stake and the bad guys are getting more resourceful every day. At Varian, our first approach is to try to make our systems and products more resilient, so we’re trying to direct resources to preventing it from happening in the first place. It’s a huge reputation risk if one of our products or systems were compromised, so we want to avoid that at all costs.

We need to do a better job of saying yes. We tend to want to say no to many risks, but there are upside benefits to some risks.

R&I: What insurance carrier do you have the highest opinion of?

I’ve worked with a number of great ones over the years. We’ve enjoyed a great property insurance relationship with Zurich. Their loss control services are very valuable to us. On the umbrella liability side, it’s been great partnering with companies like Swiss Re and Berkley Life Sciences because they’ve put in the time and effort to understand our unique risk exposures.

R&I: How much business do you do direct versus going through a broker?

One hundred percent through a broker. I view our broker as an extension of our risk management team. We benefit from each team member’s respective area of expertise and experience.

R&I: Is the contingent commission controversy overblown?

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I think so. The brokers were kind of villainized by Spitzer. I think it’s fair for brokers and insurers to make a reasonable profit, and if a portion of their profit came from contingent commissions, I’m fine with that. But I do appreciate the transparency and disclosure that came out as a result of the fiasco.

R&I: Are you optimistic about the US economy or pessimistic and why?

David Collins, Senior Manager, Risk Management, Varian Medical Systems Inc.

While we might be doing fine here in the U.S. from an economic perspective, the Middle East is a mess, and we’re living with nuclear threat from North Korea. But hope springs eternal, so I’m cautiously optimistic. I’m hoping saner minds prevail and our leaders throughout the world work together to make things better.

R&I: Who is your mentor and why?

My Dad got me started down the insurance and risk path. I’ve also been fortunate to work for or with a number of University of Georgia alumni who’ve been mentors for me. I’ve worked side by side with Karen Epermanis, Michael Rousseau, and Elisha Finney. And I’ve worked with Daniel Dean in his capacity as a broker.

R&I: What have you accomplished that you are proudest of?

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Raising my kids. I have a 15-year-old and 12-year-old, and they’re making mom and dad proud of the people they’re turning into.

On a professional level, a recent one would be the creation and implementation of our global travel risk program, which was a combined effort between security, travel and risk functions.

We have a huge team of service personnel around the world, traveling to customer sites to do maintenance and repair. We needed a way to track, monitor and communicate with them. We may need to make security arrangements or vet their lodging in some circumstances.

R&I: What do your friends and family think you do?

My 12-year-old son thought my job responsibilities could be summed up as a “professional worrier.” And that’s not too far off.

R&I: What about this work do you find the most fulfilling or rewarding?

Varian’s mission is to focus energy on saving lives. Proper administration of the risk function puts the company in a better position to financially support research that improves products and capabilities, helps to educate health care providers and support cancer care in general. It means more lives saved from a terrible disease. I’m proud to contribute toward that.

When you meet someone whose cancer has been successfully treated with one of our products, it’s a powerful reward.




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