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Ransomware Is the Hacker Biz Model of Choice: 5 Best Practices to Protect Your Network and Users

Follow these cyber security rules of thumb.
By: | October 3, 2017 • 7 min read

Ransomware attacks used to be small and isolated, targeting smaller organizations less likely to have the resources to fight back. But attackers’ tactics are changing.

The WannaCry and Petya attacks of 2017 demonstrate just how powerful and expansive a ransomware attack can be. The attacks indiscriminately struck businesses of every size and shape around the globe, and though insured losses were low, the number of machines affected, size and prominence of organizations targeted, and level of public attention garnered by these attacks approached catastrophic levels.

“Ransomware is now the business model of choice for cyber thieves,” said Nick Graf, director of information security, risk control, CNA. “Hackers used to make their money stealing data and selling on the black market. Ransomware attacks offer much quicker access to liquid assets.”

“In most cases, they don’t care about your data; they want your cash.”

And most of the time they get it quickly and quietly. By asking for small ransoms from big companies, hackers ensure the amount demanded can and will be paid. Most institutions can’t afford to waste time fighting back against a cyber attacker. They need their data to keep their businesses going; the cost of business interruption is far greater that the cost of a $300 ransom, which is what thieves demanded during the WannaCry attack.

Nick Graf, Director of Information Security, Risk Control, CNA

And as more of our world becomes computerized, attacks are likely to grow in frequency and severity.

“Vehicles are increasingly reliant on their computer operating systems. We have smart homes, wearables, and an infinite number of devices connected to the Internet of Things,” said Andy Lea, head of cyber liability products, CNA. “Software security protections are still written by humans, so they are not infallible. Perfectly secure software doesn’t exist.”

In other words, “Everything is hackable.”

Despite growing awareness around cyber threats, a large segment of the business world remains unprepared.

“Many companies are not following baselines best practices,” Graf said.

Although no preventative measures can guarantee protection from the next ransomware attack, organizations can follow these five cyber security rules of thumb:

1. Update Security Patches

While relatively easy for individuals, implementing new security patches can be challenging for large corporations who have many more machines to update, and want to ensure that new patches won’t interfere with other operational systems or customized applications.

Because of these challenges, may companies delay security updates. But installing new patches promptly may be the simplest way to stay a step ahead of opportunistic hackers.

“Microsoft released new patches two months prior to the WannaCry attack. Had businesses applied these patches, their systems would have been unaffected,” Graf said. Up-to-date endpoint protections like anti-virus and anti-malware solutions also could have prevented much of the attacks.

“In addition to anti-malware tools, end-point security can also include data leakage protection, which can alert users if someone is attempting to ex-filtrate data files from, your system,” Graf said.

2. Train in Security Awareness

No security software, however, can fully protect an organization from negligent employees.

“Your users are your weakest link,” Lea said. “If you have employees that like to click links and open attachments, they can very easily bypass other levels of security that were put in place to protect them.”

Workers may assume that if an email or attachment made it through their company’s firewall, it must be safe to open. But no spam filter is completely ironclad. Employees should be trained to spot clues indicating an email or link is illegitimate and know how what follow-up steps to take, such as calling or checking in with an email sender in person to verify their request.

3. Create a Top-Down Security Culture

Andy Lea, Head of Cyber Liability Products, CNA

For personnel to apply their training consistently, they need to understand the risks facing their company and develop a true commitment to cyber security. The only way that can happen, Lea said, is if top management sets an example.

“Everyone from senior executives down needs to be educated and aware of security risks and the potential consequences of a cyber attack,” he said. Information security requires a holistic approach, with input and effort from every facet of an organization — not just the IT team.

“It may require a cultural change to get everyone on board, and senior leaders need to drive this change,” Lea said.

Underwriters will also look for a strong security culture, evidenced by senior management’s willingness to invest in system updates as well as the existence of cyber security policies and procedures.

4. Build a Response Plan

One of those policies or procedures should be an incident response plan, identifying which team members will take action immediately following discovery of a hack or data breach.

“Being proactively ready can greatly reduce the negative impacts of an attack, including from a regulatory perspective as well as from a business interruption standpoint,” Graf said.

A ransomware attack’s biggest impact, after all, is not the ransom itself but the cost of being unable to access data, and the extra expense of getting operations up and running again.

5. Conduct a Gap Analysis

Once an organization has updated its security and policies, it should periodically conduct gap analyses to identify its weak points and ensure that cyber defenses adjust appropriately. Because technology — and hackers’ strategies — are always changing, companies’ exposure will change as well.

“No one control is enough to protect you,” Lea said.

Organizations should assess the security software and tools they have in place, like firewalls, as well as employee onboarding and training plans, company IT policies, and business recovery and continuity plans. They should examine their data to see what is at risk, and assess how they collect, store and protect it.

As part of their cyber solutions offering, CNA’s risk control specialists will sit down with companies to take a deep dive into their cyber operations.

“We’ll meet with senior members of the security staff and look holistically at the controls they have in place. We’ll spend time digging into the sensitive data they hold. Is it credit card information, healthcare information, or other financial information? Where is it stored?” Graf said. “For large distributed companies with legacy systems, the data can be all over the place. We would help them address that.”

CNA Cyber Solutions

Beyond obtaining comprehensive insurance coverage, the biggest benefit companies gain through partnerships with experienced carriers is access to risk control services. In addition to its in-house team of cyber professionals, CNA also partners with third party security services to help insureds strengthen system defenses.

“We take pride in our risk control teams and services,” Graf said. “Our employees are all specialists in their field.” Graf himself is a certified ethical hacker, while 16 other specialists are certified information privacy technologists.

“We’ve partnered with the International Association of Privacy Professionals to certify additional staff as well,” he said.

In addition to risk professionals and an experienced underwriting staff, CNA has also earned a reputation for its claims management team. “Claims services are ultimately what you’re paying for when you buy an insurance policy. We strive to provide a good experience – fair and fast – for clients, from start to finish,” Lea said.

First- and third-party coverages are also available through CNA’s NetProtect cyber liability policy.

To learn more, visit: www.cna.com/cyber.

One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. “CNA” is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities. Copyright © 2017 CNA. All rights reserved.


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with CNA. The editorial staff of Risk & Insurance had no role in its preparation.

Serving business and professionals since 1897, CNA is the commercial insurance carrier of choice for more than 1 million businesses and professionals worldwide.


Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”


“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.


“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?


“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

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