CILA executive director Malcolm Hyde on why the insurance industry needs to get to grips with cyber

Cyber can appear to be a specialist and possibly daunting subject for insurance professionals. It is likely to be outside the comfort zone of their day-to-day knowledge and involves terminology and processes many of us are unfamiliar with. But we cannot ignore the continued rise in cyber attacks and so must get to grips with this topic.

The CILA is a membership organisation with more than 4,500 individual members. We encourage the sharing of member knowledge and expertise as this supports the next generation of loss adjusters and brings continued advancement of our profession. We are, therefore, delighted that several of our members have been willing to share their experiences of dealing with cyber claims.

Case studies involving previous claims are a great way of illustrating the different types of cyber attacks and the diverse range of businesses that are targeted. It is also useful to have an appreciation of hackers, their motivations, methods, opportunity and the environment in which they operate. CILA members were fascinated to hear from such an individual at our 2014 annual conference.

From ‘hacktivists’ to criminals

Hackers can be ‘hacktivists’ who are politically motivated, cyber criminals who are attempting to gain financial reward or hackers who are attempting to destabilise or even bring down other nation states. There is a range of extremes that hackers will go to and some will carry out multiple cyber attacks to reach their final target. This could potentially involve hacking into a software producer to obtain their certification of authenticity. Subsequently, the criminal uses the certificate to make malware appear legitimate. A wolf in sheep’s clothing.

Cyber claims can involve multiple elements that requires adjusters to have a broad range of knowledge and skills, for example, business interruption issues, liability concerns and potential brand damage. Such claims require prompt action and an ability to work with numerous parties who may have different interests, concerns or priorities in relation to the incident.

The successful handling of cyber claims is about managing the whole situation and finding ways forward that work for both the business and their insurers.

Loss adjusters typically meet policyholders in person and so often provide the human touch to a claims service. They are well practised in balancing the interests of different parties, recognising conflicts of interest, managing actions required and reaching agreement on costs and steps to be taken. These skills of course come into play when dealing with a cyber claim when policyholders are likely to be in unfamiliar territory and incredibly anxious about the impact on their business.

Cyber criminals may have broadened their impact, but the basic principle is that someone has suffered, there is insurance cover in place to protect the victim and there is need for an expert to deliver the promise. Loss adjusters acting decisively, speedily, and with skill and knowledge can mean the difference between the wolf succeeding and being tamed.

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