The Super Rich Become Key Targets in Cyber World

By Lisa Lindsay | February 6, 2017

Twenty years ago, we locked our doors and windows and had a good level of confidence that our homes were safe. If a burglar wanted in, he had to stake out a home and physically break into windows and doors to gain access.

But times have changed, and technology has given cyber criminals the virtual key to our homes and every part of our lives with critical information right at their fingertips. What’s worse, they can access just about anything they want to right from their own devices. It’s disturbing, but as technology continues to develop, the risks grow exponentially, especially for the affluent.

According to R.A. Prince and Associates, an authority in the private wealth sector, “more than 60 percent of the wealthy are highly concerned about their identity getting stolen.”

Hartford Steam Boiler (HSB) Inspection and Insurance, in its own online surveys with more than 25,000 responses, found that with respect to protection against cyber attacks, 42 percent said they would like help.

How Hackers Gain Access

Hackers typically gain access into a smart home one of two ways. The traditional route is to trick a person into downloading a file onto his or her computer. Once the file is downloaded, the hacker runs a code that gives them access to the device and any information linked to it.

The second way is for hackers to target the smart home device directly. When security cameras, smart TVs, thermostat apps, and other smart home technology was created, security was not considered top of mind. These devices and programs don’t have virus protection like a computer or tablet, making them easy targets. In fact, a professional hacker “broke” into the first smart thermostat in less than 15 seconds. While a thermostat may not seem very threatening, a temperature schedule can reveal a lot of personal information. A hacker can tell when people leave in the morning, get home in the afternoon and even go to sleep. Hackers can also use their skills to move from the thermostat, to the app on a target’s phone, and then into a home computer.

Cyber Exposures

When targeting the masses, cyber criminals send out thousands of emails hoping for a response, but their tactics change and become much more sophisticated when they target the super-wealthy. Many companies are aware and have measures to protect their clients from traditional burglary and even identify theft, but nowadays hackers are focusing on cyber extortion.

Hackers gain access to a device using the easiest pathway possible be it thermostat, home Wi-Fi with the default password or even through the smart television with no security program. From there, hackers jump from device to device until they can control the home computer. At this point, hackers will lock the user out of the device and threaten to do major damage to data and software unless they are paid a large sum of money. Some hackers will even do the damage first, using ransomware, and then demand money to fix the issue and restore the computer back to normal.

Insurance Response

Traditional insurance policies will protect a client from physical damage and even identity theft, but fall short when it comes to cyber extortion and data damage. More than 20 percent of victims of these types of attacks spend between $1,000 and $5,000 to restore lost data on their devices. HSB is the first to offer personal cyber coverage and services for computer attacks, cyber extortion, online fraud and the breach of personal information involving smart phones, computers and connected home devices. Other insurers and cyber agencies offer other security measures, such as an audit and monitoring service of home networks, but the industry must do more to protect consumers.

Insurers should educate their clients on how to protect themselves in a digital world and create policies that not only cover hardware, but software and data as well. Clients will remain vulnerable as technology continues to give cyber criminals the key to their lives.

Topics Cyber

About Lisa Lindsay

Lindsay is the executive director with Private Risk Management Association (PRMA).

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Insurance Journal West February 6, 2017
February 6, 2017
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