Cyber Risks

It’s Your Employees, Stupid! How to Fix Your Cyber Security Weakest Link

Rather than viewing employees primarily as liabilities, training them to spot cyber attacks is a best practice.
By: | June 1, 2018 • 5 min read

One year on from WannaCry and NotPetya, senior executives and employees alike have spent time reviewing their companies’ cyber security defenses and their response plans in the event of attack.


They’re likely not pleased by a recently published academic survey highlighting how lucrative cyber crime has become. The annual, tax-free income of the highest earners is up to $2 million, while mid-level criminals can expect up to $900,000 and even beginner hackers average $42,000 — enough for the weekly grocery bill.

The findings will hopefully assist, rather than undermine, the progress achieved over the past 12 months in raising employees’ awareness of cyber security and their role in being alert to potential scams such as phishing emails.

Although WannaCry and NotPetya wrought the most havoc in the shipping and manufacturing industries, they proved large-scale attacks are feasible and that targets can be random rather than selected.

“Financial institutions have always been ahead of the game on cyber security, partly due to the regulator,” said Marcin Weryk, senior underwriter, XL Catlin. “The transportation sector — ranging from airlines to cargo carriers — is a close second.

“Manufacturing is also starting to come around, having realized that its systems weren’t designed with security primarily in mind. They have certainly improved but still have a long way to go.”

Gareth Wharton, CEO, cyber, Hiscox

Meanwhile cyber criminals are becoming increasingly sophisticated, said Andrew Beckett, MD and EMEA leader for Kroll’s cyber security and investigations practice.

He noted that back in 2012, Sir Iain Lobban, then the head of the UK’s Government Communications Headquarters, estimated organized crime was four years behind state entities in the sophistication of its cyber attacks.

“Since then you’ve had the emergence of the Shadow Brokers, who’ve hacked and released details of the National Security Agency’s own hacking methods. The gap has closed as organized crime catches up with state-backed entities,” Beckett said.

There is growing acceptance that while companies should take all reasonable steps to bolster their resilience, full protection against cyber attacks is unattainable.

“Companies can be regarded as always two steps behind the intelligent criminal or hacker who can spot and exploit any vulnerability,” said Shannan Fort, cyber product development leader, Aon’s global broking center.

“For companies, it’s a fine balance in deciding at which point they decide to transfer the risk. There’s a threshold at which more money and resources can be spent on the system without any commensurate improvement in security. It’s then an issue of spotting a breach at the earliest possible opportunity and minimizing the impact.”

Beckett agreed. “The emphasis has changed, and the focus is less on keeping the attackers out and more on spotting them early and having an effective response plan in place.”

Employee Risk Management in Cyber Security

When it comes to the issue of cyber security, the question everyone should ask is, “Where are the company jewels and how do we protect them?” said Karen Kukoda, senior director, strategic partnerships, FireEye.

Companies aiming to make employees more cyber security-savvy should be able to count on them sharing this aim, added Gareth Wharton, CEO, cyber, Hiscox.

“Employee screening is vital, as is having good management processes in place for when an employee departs. This includes ensuring they can’t log into the system after departure and limiting access to only those systems relevant to their job — for example, they can’t access payments if they’re not in the accounts department.”


Training the workforce to become more aware of cyber security is nothing new, said Shiraz Saeed, national practice leader, cyber risk, Starr Companies.

“The big issue is getting employees to understand that they have a responsibility to protect company information, just as it’s the employer’s responsibility to protect employees,” he added. “Many senior executives in the older-age ranges aren’t keen on the need, say, to learn five different passwords when logging in, which means even now there are still a lot of single sign-ons.

“Millennials are generally far more open and receptive to additional security measures, so your workforce’s attitude is very much determined by its demographics.”

“The big issue is getting employees to understand that they have a responsibility to protect company information, just as it’s the employer’s responsibility to protect employees.” — Shiraz Saeed, national practice leader, cyber risk, Starr Companies

Weryk is optimistic attitudes are changing company-wide. “Two years ago, when a company gave out tokens for multi-factor authentication to employees, many regarded it as annoying, but they’ve quickly come to appreciate the need for it,” she said.

Hiscox’s Wharton noted employees are already accustomed to having  tougher levels of security applied to workplace devices, simply because they see the approach in their other day-to-day activities, such as personal banking.

Dave Cameron, XL Catlin’s chief information security officer, added most employees appreciate that while their company has to protect thousands of devices and hosts, the successful attacker only has to find one that is vulnerable.

“It’s good that heightened awareness means, for example, employees are more likely to question the authenticity of an email that could conceal a phishing scam,” he said.

Kukoda also advocates for this approach: “Tabletop exercises are a great way of identifying where the company can strengthen its security. As the strategy is developed, they must be able to demonstrate exactly where these improvements have been made.

“Threat groups tend to target a specific industry rather than an individual company to discover which are the most vulnerable and likely to reveal their intellectual property secrets or accede to a ransom demand,” she said.

It might be assumed that with the trend for more employees to bring their own smartphones, laptops and tablets to the workforce and connecting on the secure corporate network — and also working more from home or away from the premises — companies might want to review their “bring your own device” (BYOD) policies.

“Two years ago, when a company gave out tokens for multi-factor authentication to employees, many regarded it as annoying, but they’ve quickly come to appreciate the need for it.” — Dave Cameron, chief information security officer, XL Catlin

However, Beckett pointed out location is less an issue than the equipment the employee is working with.


“WannaCry and NotPetya exploited Windows’ vulnerability, but this was well-known for some time before the attack and largely affected older devices with outdated systems. Employees using BYOD usually don’t use Windows XP.

“To an extent, that’s due to vanity, but it also sends the wrong message to clients and colleagues if you’re still using an antique device. Individuals instead want a state-of-the-art laptop that declares they are at the top of their game,” Beckett said.

Future Cyber Attack Threats

Insurers are devoting resources to educating company work forces. Despite the increase in attacks and the potential for major losses, more have joined the original top four cyber insurers — Chubb, Beazley, AIG and XL Catlin — in developing detailed offerings and holistic pre-incident and response programs.This includes alerting companies to new threats. &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.


In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.


Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”


How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.


One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]