A form of hacking is on the rise that insurers and their clients should be aware of: fraudulent instruction.
The latest Beazley Breach Insights report outlines the escalating threat, where a hacker gets into systems by way of phishing email designed to look authentic. These are often realistic-looking requests to transfer funds to bogus accounts. Beazley said its Beazley Breach Response Services arm dealt with a quadrupling of reported fraudulent instruction incidents in 2017, where policyholders dealt with losses from a few thousand dollars up to $3 million.
For all of 2017, claims amounts after fraudulent instruction incidents averaged $352,000, Beazley said.
“Cyber-criminals are finding new ways of getting organizations to part with their hard-earned cash,” Katherine Keefe, global head of Beazley Breach Response Services, said in prepared remarks. “In 2017 we saw fraudulent instruction emerge as a new trend which offers significant reward for the perpetrators in return for little effort, but brings potentially devastating financial consequences for the victim.”
Out of the total incidents reported to Beazley, 22 percent affected professional services, 21 percent involved financial services and 12 percent came from the retail industry.
Why does the rise in fraudulent instruction breaches matter? Beazley pointed out that beyond losing money, these incidents leave organizations having to pursue expensive and thorough systems analyses to make sure individuals’ personal and private data have not been compromised.
Beazley Breach Response said it has handled more than 7,500 data breaches since its inception in 2009. Parent Beazley plc handles specialist insurance operations in the U.S., Europe, Canada, Latin America, Asia, the middle east and Australia.
Source: Beazley/Beazley Breach Response