Risk Insider: Kevin Kalinich

Managing Malware Masterfully

By: | September 1, 2016 • 2 min read
Kevin Kalinich is the global cyber risk practice leader for Aon Risk Solutions, focusing on identifying exposures and developing insurance solutions. He can be reached at [email protected]

As ransomware morphed from low-severity consumer phishing to targeting entire networks of computers in hospitals, universities and businesses, it became more costly.

It also looks like email recipients have a lot more learning to do.

According to 2016 Verizon research, 23 percent of recipients open phishing messages and 11 percent of recipients click on attachments.

Ransomware, however, is just one version of “malware,” which includes all types of hostile or intrusive software, such as computer viruses, worms, trojan horses, spyware, adware, scareware, and other malicious programs. Malware, which stands for “malicious software,” can take the form of executable code, scripts, active content, and other software.

Entities should consider malware risks on an enterprise level.  It’s not just about IT. All employees, partners, customers and third-party outsourced providers should be considered.

The number of unique kinds of malware jumped from six million at the beginning of 2015 to just over 12 million by the end of the year, and the category of malware specifically targeting mobile phones has seen dramatic growth.

Organizations should quantify potential malware exposures in terms of financial statement impact and review potential available insurance coverage.

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Malware could trigger a number of different lines of insurance, such as crime ($81 million Bank of Bangladesh heist), kidnap & ransom (Hollywood Presbyterian Medical Center’s $17K bitcoin ransom), property (Stuxnet in Iranian nuclear facility & other grid/manufacturing), general liability (Jeep Cherokee and medical device hacks), professional liability (Internet of Things service interconnectivity) and marine/supply chain (Islamic Republic of Iran Shipping Lines 2011).

Entities should consider malware risks on an enterprise level. It’s not just about IT. All employees, partners, customers and third party outsourced providers should be considered.

Even with top notch defenses, however, how do you defend against something that may be inevitable? Is there anything a business can do to protect against losses from malware? Many malware attacks exploit known bugs in software, and attackers depend on victims not installing patch updates. There are a number of technological and procedural risk management methods to help reduce the financial statement impact from malware, including:

  • Vet software purchases from a security standpoint as well as an operational standpoint.
  • Train employees regarding phishing, mobile apps, attachments, links and the like. Instruct employees not to open email from unknown sources and to verify sources before opening attachments or clicking links in any email, IM, or posts on social networks.
  • Ban workplace usage of unnecessary file types, software applications, websites, and BYOD downloads.
  • Improve detection and remediation of malware incidents.
  • Segregate data by priority classification.

Kalinich chart

 

 

According to the recent book, Dark Territory: The Secret History of Cyber War (June 2016):

“The only completely secure computer is a computer that no one can use … They have given up on the idea that they can somehow make a black box that nobody can get into.”

It turns out that incident response is as important as prevention from a balance sheet impact standpoint. Is there a contingency plan or business continuity plan in place? Some suggested actions to take if your computer is infected with malware:

  • Immediately stop using any computers on an infected network that performs sensitive activities.
  • Contact your IT department or a qualified IT professional to analyze your computers and network, and to remove the malware.
  • After you have taken appropriate steps to remove malware, change the passwords for any user accounts or systems that were accessed while using the infected computer.
  • Promptly notify the appropriate insurance carriers.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

As risk manager for a cloud computing and software company, Laurie LeLack knows that the interconnected economy and cyber security remain top risks.
By: | December 14, 2017 • 4 min read

R&I: What was your first job?

One of my first jobs was actually at a local insurance agency when I was a high school student, before I had any idea I was going to get into insurance. After college, I was a claims analyst at Sunbeam.

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

I fell into it after college, where I studied international business. I had a stack of resumes, and Sunbeam came to Florida from Rhode Island, so I applied. I interviewed with the director of risk management and just stuck with it and worked my way up.

R&I: What is the risk management community doing right?

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Getting a holistic view of risk. Risk managers are understanding how to get all stakeholders together, so we understand how each risk is aligned. In my view, that’s the only way to properly protect and serve our organizations.

R&I: What could the risk management community do better?

We’ve come a long way, but we still have to continue breaking down silos at organizations. You also have to make sure you really understand your business model and your story so you can communicate that effectively to your broker or carrier. Without full understanding of your business, you can’t assess your exposures.

R&I: What was the best location and year for the RIMS conference and why?

Being on the East Coast, I like Philadelphia.

Laurie LeLack, Senior Director, Corporate Risk and Americas Real Estate, Citrix Systems Inc.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Organizations understanding their cyber risk exposures and how this line of insurance can best protect them. Five to ten years ago, people shrugged it off as something just for technologies companies. But you can really see the trend ticking up as a must-have. It was always something that was needed, but people came to their own defining moments as we got more involved in electronic content and social media globally. Cyber risk is inherent in the way we do business today.

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

The advent of security and contractual obligations. These are concerns as we all play a part in this big web of a global economy. There’s that downstream effect — who’s going to be best insulated at the end of the day should something transpire, and did we set the right expectations?

R&I: Is the contingent commission controversy overblown?

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I think so. At the end of the day, it’s all about the transparency you’re getting from the people you work with. I think some best practices in transparency came out of the situation, but we were working on a fee basis, so it wasn’t as much of an issue for us as it may have been for other companies.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I’m cautiously optimistic. We seem to be stable in terms of growth, and I’m hoping that the efficiencies and the economies of scale we achieve through technology will benefit us. But I’m also worried about the impact that could have on the number of jobs globally.

R&I: Who is your mentor and why?

Robert O’Connor, my former director when I was first on-boarded at Sunbeam, gave me so many valuable tidbits. I’ll call him to this day if I have an idea I want to bounce off him. He’s a good source of comfort and guidance.

R&I: Of what accomplishment are you most proud?

I have two very empathetic, healthy and happy boys. Eleven and soon-to-be 14.

On the professional side, there were a lot of moments during my career at Citrix where we were running a very lean organization, so I had the opportunity to get involved in many different projects that I probably wouldn’t have had in other larger organizations.

R&I: What is your favorite book or movie?

My favorite movie is Raiders of the Lost Ark.

R&I: What’s the best restaurant you’ve ever eaten at?

A place in Santa Barbara called Bouchon.

R&I: What is the most unusual/interesting place you have ever visited?

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Caverns in Gatlinburg, Tennessee. They were interesting. It was cool to see these stalagmites and stalactites that have been growing for millions of years, and then just above ground there are homes from the 1950s.

R&I: What is the riskiest activity in which you’ve ever engaged?

Riding on the back of my husband’s Harley.

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

I like educating people and helping them find their ‘aha’ moment when you highlight areas of risk they may not have thought about. It allows people to broaden their horizons a little bit when we talk about risk and try to explore it from a different angle. I try not to be the person who always says “No” because it’s too risky, but find solutions that everyone is comfortable with given a risk profile.

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

I tell my kids I protect people and property and sometimes the things you can’t feel or touch.




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