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Hacking attacks could see surge in cyber insurance claims
While 2021 has seen investors put Covid in the rear-view mirror, a new threat to businesses has emerged which has put the insurance industry on guard in case it causes a wave of new claims.
At the start of March, US software giant Microsoft revealed there were ‘vulnerabilities’ in its Exchange Server mail and calendar software used by corporate and government data centres.
More worrying, the firm admitted the vulnerabilities went back at least a decade and had been exploited since the start of 2021 by Chinese hackers using new techniques to infiltrate US companies.
The seriousness of the breach can’t be overstated as Exchange is used by hundreds of thousands of firms and public bodies around the world.
The attack will likely cause a stampede of spending on security software and a more widespread adoption of cloud-based email, probably to the advantage of Microsoft’s arch-rival AWS.
Experts believe more than 500 email servers in the UK may have been compromised, including those of financial companies, and are warning there could be a second wave involving mass ransomware attacks.
A group of hackers recently breached a huge database of security footage collected by Silicon Valley start-up Verdaka and gained access to live feeds of 150,000 surveillance cameras inside businesses, hospitals, police buildings, prisons and schools.
Video was aired of the inside of a Tesla warehouse in Shanghai showing workers on an assembly line, one of 222 Tesla camera feeds the hackers claimed to have accessed.
The same group previously claimed credit for hacking US chipmaker Intel and Japanese car maker Nissan, ‘fighting for freedom of information and against intellectual property’.
While the hacks are likely to drive an uptick in business for cyber security firms, the insurance industry in contrast is worried about the potential costs given it has made a big push in recent years into cyber cover.
Having lost its battle with the UK regulator over business interruption insurance, which has resulted in hundreds of millions of losses for the industry, there are now fears that cyber cover is the next ‘black swan’ event with potentially severe consequences.
Customers who have taken out cover, only to find that their IP has been broadcast to the world, will understandably be dusting off their policies and making sure that the insurers can’t argue their way out of paying up for insurance taken out in quieter times.