Cyber Vulnerabilities

Cyber hackers are on the attack. Yawn, so what else is new?

Nothing, except those attacks are happening more and more frequently and at higher and higher levels.

A study released this month by the Government Accountability Office showed that the number of cyber security incidents reported by federal agencies to the U.S. Computer Emergency Readiness Team increased 782 percent from 2006 to 2012; from roughly 5,500 incidents per year to nearly 49,000.

The New York Times on Feb. 18 reported that a group of hackers with ties to the Chinese army is responsible for recent cyber attacks on organizations such as Coca-Cola and the International Olympic Committee.

Around the same time, Apple and Facebook both reported that their systems had been compromised.

“Threats to systems supporting critical infrastructure and federal operations are evolving and growing. … The increasing risks are demonstrated by the dramatic increase in reports of security incidents, the ease of obtaining and using hacking tools, and steady advances in the sophistication and effectiveness of attack technology,” the GAO said in its cyber security report.

Or, as one Texas insurance agent put it: “The people that are trying to break into your computer are a lot smarter than the people that are trying to keep them from breaking into your computer.”

That was Pat Arthur, a shareholder and producer at the Dallas-based insurance firm, McQueary Henry Bowles Troy, speaking during a panel discussion at the Joe Vincent Management Seminar, held by the Independent Insurance Agents of Texas in Austin in late January.

Arthur sells a lot of cyber liability insurance coverage. He said he relies on one simple truth when discussing with clients their need for cyber liability protection: No matter how many firewalls a company’s IT department builds into their technology systems, if anyone in that company can use the system to access the Internet, there’s a hole in the wall. If there’s hole in the wall, the hackers can get in, Arthur said.

Recent examples of hacking attacks against well-positioned companies such as Apple and Coca-Cola, not to mention the federal government and the U.S. military, are proof positive that the need for cyber security insurance products and services won’t be waning anytime soon.

Around 10 years ago there were maybe six or eight insurers that sold cyber liability coverage, Arthur said. The price was high and the coverage limited. Now, he said, there are at least 28 insurance carriers that he knows of that sell such policies, at a much lower price and with a lot more coverage.

That means agents and the clients they serve have a lot to choose from when they are looking to mitigate potential cyber vulnerabilities.

Topics Cyber