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Monthly Archives: September 2013

Cyber Threats Top Concern over Other Business Risks

technologyA survey of perceptions about cyber risk, released by AIG earlier this year, found that corporate executives are more concerned about cyber threats than about other major business risks.

Survey Results

More than 85% of the 258 executives surveyed said they were very or somewhat concerned about cyber risks to their organizations, compared with the group’s response to six other areas of risk, including income loss (82%), property damage (80%), and securities and investment risk (76%).

AIG noted that 80% of executives and insurance brokers said they find it difficult to keep pace with changing cyber threats.

Other Findings from the Survey

More than two out of three (69%) executives and brokers believe that the reputational risk from a cyber attack is far greater to a company than the financial risk.

In addition, the survey found that:

  • More than seven in ten (75%) executives and brokers say legal compliance issues are making companies think more about cyber risks
  • The vast majority of insurance brokers and executives (82%) believe hackers are the primary source of cyber threats, though a significant portion of those surveyed (71%) also perceive human error as a significant component of cyber risk

Why is this important?

Your company, your clients, and your business partners are depending on you to ensure that cyber risk is being addressed properly.  With a comprehensive and strategic approach to cyber risk management, you will accomplish this without breaking the bank.

Cybercriminals Ruin Escrow Firm and Cause Job Losses

Hacker and laptop waiting for somethingEfficient Services Escrow Group of Irvine, California, was subjected to a $1.5 million Cyber heist that caused it to go out of business and lay off all 9 of its employees. Escrow companies are responsible for safeguarding funds, and if escrowed funds are at risk, the state regulator has the right to step in and protect those escrowed funds.

What went wrong?

Between December 2012 and January 2013, Efficient Services was hit with three separate fraudulent wire service transfers. These were from the company’s bank, First Foundation of Irvine, CA, to bank accounts in Russia and China.  The first $432,215 that left Efficient Services’ account on Dec. 17 was recovered from Russia, but two other wires totaling over $1.1 million, which were sent to China on Jan. 24 and Jan. 30, were not recovered.

Efficient Services reported its losses to the California Department of Corporations on February 22, which launched an investigation. On Feb. 28, The Department of Corporations froze the escrow company’s activity and noted that the company had previously had instances of negligent bookkeeping and record-keeping practices.

According to former Washington Post reporter and now fraud blogger Brian Krebs, who first reported the Efficient Services incident on Aug. 13, the bank initially thought the losses resulted from embezzlement, not an account hack.

Why is this important?

Since then, a state investigation determined that a cyber theft was to blame for the losses. The cause of the incident was a remote access Trojan virus that was planted in Efficient Services’ systems. Nonetheless, the escrow company, unable to make up for its losses, has closed.

This incident now stands as one of the largest account takeover cases on record, eclipsed only by the June 2010 Global Title Services theft, which resulted in $2 million in fraudulent transfers and just over $200,000 in unrecovered losses. 

Lessons Learned

In a case like this it is hard to determine whether the responsibility lies with the company or the bank.  No litigation has been filed yet, but a civil suit may be filed in order to resolve the issue of responsibility for this case. Regardless, the fact remains that a cyber security breach has caused the company to close its doors and terminate jobs. 

This cyber attack killed a viable business that was on its way to clear half a million in profits in 2014 and a million the year after.

ABEXAccess.com News: Your Policy Renewal Data Will Be Pre-Loaded

Baby Ostrich in EggIn gearing up to our official launch of ABEXAccess.com, we will continue to provide you with information of what your experience will be like with this groundbreaking platform for Real-Time rating and paperless policy issuance.

Why is it awesome?

To help make it easy for you to come on board with ABEXAccess.com, the ABEX team will enter your policy renewal data into the system for you. That way whenever you login to ABEXAccess.com, your policies that are coming up for renewal or have been renewed will already be in the system! 

 How does it work?

As we approach rollout of ABEXAccess.com, the ABEX team will enter policy renewal data into the system. Prior to the renewal, the information collected from your client may be updated before ABEX issues the renewal. As brokers come on board with ABEX, they will be able to see all of their ABEX policies. ABEX understands that brokers all have different workflows and levels of technology and will work with everyone to ensure the best experience and subsequent benefits from using ABEXAccess.com!

Your brokerage will be notified by ABEX when they can start using ABEXAccess.com and receive onboarding information. When you have gone through the onboarding process and login to ABEXAccess.com, you will be able to look up policies for your clients, confirm the policy details, and submit new business to ABEX for referral and policy issuance – all in Real-Time!

Show me!

Below is an example of a screen shot. Information about the new renewal policy will be entered into ABEXAccess.com by ABEX staff.

ABEX staff will issue the policy and send the policy information to you. Once you are onboard with ABEXAccess.com, you will be able to see all of your policy information!  

Renewal Policy

Please click here for a larger image and click here to learn from our blog about other ABEXAccess.com features. 

ABEXAccess.com will be released in the coming weeks, and those interested in test driving it can contact us at quotes@abexinsurance.com



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