Smaller Business, Bigger Risk

By: | December 1, 2013 • 3 min read
Ara Trembly is founder of The Tech Consultant and The Rogue Guru Blog. He can be reached at [email protected]

More and more hacking incidents and identity thefts are reported in the mainstream media, and most of us are thus uncomfortably aware of the fact that such attacks are increasing. What may not be as obvious, however, is that more and more cyber criminals are targeting smaller enterprises — because they tend to have fewer defenses and because they may provide a gateway to larger, more profitable targets.


In its 2013 Internet Security Threat Report, Symantec Corp., a provider of security software, found that the largest growth area for targeted data attacks in 2012 was businesses with fewer than 250 employees (31 percent of all attacks targeted them).

“This is especially bad news because based on surveys conducted by Symantec, small businesses believe they are immune to attacks targeted at them,” the report noted.

Indeed, the same may be said for smaller insurers and a plethora of insurance brokers. As the report pointed out, however, “While small businesses may assume that they have nothing a targeted attacker would want to steal, they forget that they retain customer information, create intellectual property and keep money in the bank.”

Confidential customer and industry data ripped from smaller enterprises are just as valuable to identity thieves as information stolen from larger systems.

And while some may argue that larger enterprises present more profitable targets, it could also be said that smaller operations — with smaller operating budgets — will tend to have less sophisticated defenses, and thus be easier to attack, the report added.

“Criminal activity is often driven by crimes of opportunity. With cybercrimes, that opportunity appears to be with small businesses,” stated Symantec.

“Even worse, the lack of adequate security practices by small businesses threatens all of us. Attackers deterred by a large company’s defenses often choose to breach the lesser defenses of a small company that has a business relationship with the attacker’s ultimate target, using the smaller company to leapfrog into the larger one.”

This last point cannot be sufficiently emphasized. A large insurer’s system defenses may be adequate to deal with direct attacks from unknown sources, but what about things that seem to walk in the door from an agency or broker that does business with the insurer on a regular basis?

It is certainly conceivable that a cyber criminal would be able to steal the email addresses and other information about legitimate employees of an agency or brokerage — then use those addresses as a safe entry into the insurer’s systems. Once past the insurer’s “palace guard,” the intruder could then plant malware to take control of the network, or simply begin stealing information.


But would a cyber crook really go to all that trouble? If the end reward is sufficient, the answer is most certainly in the affirmative. From a larger insurer’s or broker’s point of view, then, the key is to make certain that the defenses of our smaller business partners are up to snuff. That may mean making site visits to evaluate the security profile of those partners (and of vendors, for that matter), or it may mean investing in commercial systems defenses that are then given to our partners — truly a win-win, since it protects both insurer and business partner.

Should a larger insurer or broker be forced to help fund defenses for its smaller partners? Probably not, but the investment certainly seems worth it.

More from Risk & Insurance

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The Profession

Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

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

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

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


I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

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

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

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

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

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

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

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

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

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


Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

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

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

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

Favorite movie is definitely “Good Will Hunting.”

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

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

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

The Grand Canyon. It is just so vast. A close second is Stonehenge.

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


A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

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

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

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

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

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