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Allianz: Cyber crime brings expensive losses for companies, but internal failures most frequent cause of cyber claims

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  • AGCS analysis of more than 1,700 cyber claims: External events such as “DDoS” attacks result in the most costly cyber losses but internal incidents like human error or systems failure occur more often, albeit with a lower financial impact.
  • Business interruption is the main cost driver of cyber claims. Inability to access data or services can have a significant impact on revenues, given growing reliance on online sales.
  • Rise in ransomware attacks, the cost of larger data breaches and the Covid-19 working landscape present significant future cyber risks.

JOHANNESBURG/LONDON/MUNICH/NEW YORK/PARIS/SAO PAULO/SINGAPORE – Media OutReach – 19 November 2020 – External attacks on companies result in the most expensive cyber insurance losses but it is employee mistakes and technical problems that are the most frequent generator of claims by number, according to a new report from Allianz Global Corporate & Specialty (AGCS), Managing The Impact Of Increasing Interconnectivity — Trends In Cyber Risk. The study analyzes 1,736 cyber-related insurance claims worth EUR 660mn (US$ 770mn) involving AGCS and other insurers from 2015 to 2020.

 

“Losses from incidents such as distributed denial of service (DDoS) attacks or phishing and ransomware campaigns account for a significant majority of the value of cyber claims today,” says Catharina Richter, Global Head of the Allianz Cyber Center of Competence, which is embedded into AGCS. “But although cyber crime generates the headlines, everyday systems failures, IT outages and human error incidents can also cause problems for companies, even if their financial impact is not, on average as severe. Employers and employees must work together to raise awareness and increase cyber resilience.”

The number of cyber insurance claims AGCS has been notified of has steadily risen over the last few years, up from 77 in 2016, when cyber was a relatively new line of insurance, to 809 in 2019. In 2020, AGCS has already seen 770 claims in the first three quarters. This steady increase in claims has been driven, in part, by the growth of the global cyber insurance market which is currently estimated to be worth $7bn according to Munich Re. AGCS started offering cyber insurance in 2013 and, in 2019, generated more than EUR 100mn in gross written premium in this segment. At the same time the report also highlights that there has been a 70%+ increase in the average cost of cyber crime to an organization over five years to $13mn and a 60%+ increase in the average number of security breaches.

 

Losses resulting from external incidents, such as DDoS attacks or phishing and malware/ransomware campaigns, account for the majority of the value of claims analyzed (85%) according to the report, followed by malicious internal actions (9%) — which are infrequent but can be costly. Accidental internal incidents, such as employee errors while undertaking daily responsibilities, IT or platform outages, systems and software migration problems or loss of data account for over half of cyber claims analyzed by number (54%) but, often, the financial impact of these is limited compared with cyber crime. However, losses can quickly escalate in the case of more serious incidents.

 

Business interruption is the main cost driver behind cyber losses, accounting for around 60% of the value of all claims analyzed in the report, followed by costs involved with dealing with data breaches.

The cyber risk environment is not expected to become any easier in future, the report notes. Businesses and insurers are facing a number of challenges such as the prospect of more expensive business interruptions, the rising frequency of ransomware incidents, more costly consequences of larger data breaches given more robust regulation and litigation, as well as the impact from the playing out of political differences in cyber space through state-sponsored attacks. The impact of these trends is also the subject of a new AGCS podcast.

The huge rise in remote working due to the coronavirus pandemic is also an issue. Displaced workforces create new opportunities for cyber criminals to gain access to networks and sensitive information. Malware and ransomware incidents are already reported to have increased by more than a third since the start of 2020, while coronavirus-themed online scams and phishing campaigns about the pandemic continue. At the same time the potential impact from human error or technical failure incidents may also be heightened.

While exposures are rising, the Covid-19 outbreak cannot yet be said to be a direct cause of cyber-related claims. AGCS has seen the first few cyber claims that can be indirectly attributed to the Covid-19 landscape, including ransomware attacks which can be linked to the shift to more remote working. However, it’s too early to confirm a broader trend.

 

Ransomware threats surge

Already high in frequency, ransomware incidents are becoming more damaging, increasingly targeting large companies with sophisticated attacks and hefty extortion demands. There were nearly half a million ransomware incidents reported globally last year, costing organizations at least $6.3bn in ransom demands alone. Total costs associated with dealing with these incidents are estimated to be well in excess of $100bn.

 

“High-end hacking tools are more widely available driven by the growing ‘commercialization of cyber-hacks’. Increasingly, criminals are selling malware to other attackers who then target businesses demanding ransom payments,” says Marek Stanislawski, Global Cyber Underwriting Lead at AGCS. “However, extortion demands are just one part of the picture. Business interruption can bring the most severe losses — with downtimes becoming longer — while systems and data restoration costs can quickly escalate.”

 

Business interruption and digital supply chain vulnerability growing

“Whether due to ransomware, human error or a technical fault, the loss of critical systems or data can bring an organization to its knees in today’s digitalized economy,” says Joerg Ahrens, Global Head of Long-Tail Claims at AGCS. “The inability to access data for an extended period of time can have a significant impact on revenues — for example, if a company is unable to take orders. Similarly, if an online platform is unavailable due to a technical glitch or cyber event, it could bring large losses for companies that rely on it, particularly given today’s increasing reliance on online sales or digital supply chains.”

 

Data breaches and state-sponsored attacks

 

The cost of dealing with a large data breach is rising as IT systems and cyber events become more complex, and with the growth in cloud and third-party services. Data privacy regulation, which has recently been tightened in many countries, is also a key factor driving cost, as is growing third-party liability and the prospect of class action litigation. So-called mega data breaches (involving more than one million records) are more frequent and expensive, now costing $50mn on average, up 20% over 2019.

 

In addition, the impact of the increasing involvement of nation states in cyber-attacks is a growing concern. Major events like elections and Covid-19 present significant opportunities. During 2020 Google said it has had to block over 11,000 government-sponsored potential cyber-attacks per quarter. Recent years have seen critical infrastructure, such as ports and terminals and oil and gas installations hit by cyber-attacks and ransomware campaigns.

 

Prepare, practice and prevent

 

Preparation and training of employees can significantly reduce the consequences of a cyber event, especially in phishing and business email compromise schemes, which can often involve human error. It can also help mitigate ransomware attacks, although maintaining secure backups can limit damage. Cross-sector exchange and cooperation among companies — such as what has been established by the Charter of Trust — is also key when it comes to defying highly commercially-organized cyber crime, developing joint security standards and improving cyber resilience.

The Covid-19 landscape brings new challenges. With home-working widespread, security around access and authentication points is critical but organizations should also ensure there is sufficient network capacity as this can have a significant impact on lost income if there is an outage.

About Allianz Global Corporate & Specialty SE

Allianz Global Corporate & Specialty (AGCS) SE is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 32 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,450 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.

www.agcs.allianz.com

[View Image]LinkedIn

Twitter: @AGCS_Insurance


Cautionary Note Regarding Forward-Looking Statements

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may”, “will”, “should”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” and similar expressions identify forward-looking statements.

Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group’s core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.

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TRAC Intermodal Releases Case Study on Port of NY/NJ Chassis Pool Model Success During Record Port Growth

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PRINCETON, N.J., Dec. 4, 2020 /PRNewswire/ — As local economies reopen and imports surge at many U.S. ports, ensuring the timely flow of cargo through these ports takes on added urgency. TRAC Intermodal has developed a detailed case study on how the chassis pool model at the Port of NY/NJ has supported significant increases in container cargo volumes over the past few years. TRAC's Metro Pool is the largest chassis pool in the region, with 17,000 chassis supporting this market.

One of the nation's busiest ports, the Port of NY/NJ recently reported its best month ever for import volume. The Port has invested heavily in infrastructure improvements such as raising the Bayonne Bridge, deepening harbors and upgrading roadways to and from terminals, all to help accommodate larger TEU ships and the cargo volumes they bring. As a direct result of these efforts, between 2017 and 2019, container cargo volumes at the Port of NY-NJ increased 11.3%. Despite this volume increase, compounded by sudden spikes in demand during the 2019 U.S.-China trade war and a record container volume rebound in the summer and fall of 2020, the chassis system was able to maintain a smooth cargo flow, with little to no disruptions.

“The TRAC case study identifies ways in which the Port's chassis provisioning model along with our quality fleet care programs have enabled port growth and offer motor carriers ready access to safe, high-quality equipment, operational efficiencies and equipment choices to meet their needs,” says Daniel Walsh, CEO at TRAC Intermodal.

A copy of the case study, “Port of NY/NJ Chassis Pool Model Success in the Face of Record Cargo Growth,” is available for download here or by visiting https://www.tracintermodal.com/case-study-port-nynj.

About TRAC Intermodal
TRAC Intermodal (www.tracintermodal.com) is North America's leading marine chassis pool manager and equipment provider, with 11 pools under management across the U.S. TRAC has the largest fleet of marine and specialty chassis in North America and operates an extensive network of facilities. TRAC's subsidiaries offer emergency fleet roadside assistance through FYX, and maintenance and repair services and other depot solutions through TRAC Services.

For more information, contact:                        

Rick Leonard
RCL Communications
203.434.7734
[email protected]

 

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SOURCE TRAC Intermodal

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KanKan AI Announces the Release of its Smart Customer Retail Platform for the Banking Industry

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LAS VEGAS, Dec. 4, 2020 /PRNewswire/ — Remark Holdings, Inc. (NASDAQ: MARK), a diversified global technology company with leading artificial intelligence (“AI”) solutions and digital media properties, today announced that several large banks in China, including the Bank of China, have installed the Smart Customer Retail Platform created by Remark's KanKan AI business to act as a centralized, interactive hub for the marketing and sale of the banks' products and services. For the Bank of China, the installation of the Smart Customer Retail Platform represents the first in a series of systematic upgrades planned by the bank. The initial installations are expected to generate approximately $1.5 million in revenue during Remark's fourth quarter.

Smart Customer Banking Platform

“The banking industry has gradually transformed from the traditional method of bank employees providing services at the counter to highly personalized AI-driven interactive services. Bank of China's implementation of Remark AI's system reflects the initial capture of the Chinese banking industry's estimated $2 billion annual budget upgrade opportunity as 20,000 branches of major banks are scheduled to be upgraded each year,” noted Kai-Shing Tao, Chairman and Chief Executive Officer of Remark Holdings. “The Smart Customer Retail Platform, which integrates Kankan AI platform, can be customized to meet each branch's marketing goals by personalizing services for each customer.”

Several large banks in China, including the Bank of China have installed the Smart Customer Retail Platform.

KanKan AI's computer vision technology identifies customers, allowing the banks to know whom they are interacting with and also providing targeted and personalized marketing information. Customers can use the platform to complete transactions such as the purchase of investment products and the completion of credit card applications. In addition, Kankan AI provides valuable feedback to bank managers by analyzing customers' interactions on a real-time basis.

Given the initial success, KanKan AI is targeting sales to an additional 500 branches of the banks that participated in the recent pilot rollouts of the Smart Customer Retail Platform.

Additional information regarding KanKan AI and its other innovative solutions can be found on its website (www.remarkdip.com).

Remark Holdings, Inc. (PRNewsFoto/Remark Media, Inc.)

About Bank of China

Bank of China is one of the four biggest state-owned commercial banks in China. It was founded in 1912 by the Republican government to replace the Daqing Bank. It is the second oldest bank in mainland China still in existence (after the Bank of Communications, founded in 1908). From its establishment until 1942, it issued banknotes on behalf of the Government along with the “Big Four” banks of the period: the Farmers Bank of ChinaBank of Communications and Central Bank of the Republic of China. Its headquarters are in Xicheng DistrictBeijing. By the year end of 2019, the Bank of China had a total of 228,000 branches worldwide. As of August 2020, it was the fourth-largest bank in the world in terms of assets, ranked after the other three Chinese banks. Additional information regarding Bank of China can be found on its website (www.boc.cn/en).

About Remark Holdings, Inc.

Remark Holdings, Inc. (NASDAQ: MARK) delivers an integrated suite of AI solutions that enable businesses and organizations to solve problems, reduce risk and deliver positive outcomes. The company's easy-to-install AI products are being rolled out in a wide range of applications within the retail, financial, public safety and workplace arenas. The company also owns and operates an e-commerce digital media property focused on a luxury beach lifestyle. The company is headquartered in Las Vegas, Nevada, with additional operations in Los Angeles, California and in Beijing, Shanghai, Chengdu and Hangzhou, China. For more information, please visit the company's website (www.remarkholdings.com).

Forward-Looking Statements

This press release may contain forward-looking statements, including information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, including those discussed in Part I, Item 1A. Risk Factors in Remark Holdings' Annual Report on Form 10-K and Remark Holdings' other filings with the SEC. Any forward-looking statements reflect Remark Holdings' current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. Given such uncertainties, you should not place undue reliance on any forward-looking statements, which represent Remark Holdings' estimates and assumptions only as of the date hereof. Except as required by law, Remark Holdings undertakes no obligation to update or revise publicly any forward-looking statements after the date hereof, whether as a result of new information, future events or otherwise.

Company Contacts

E. Brian Harvey
Senior Vice President of Capital Markets and Investor Relations
Remark Holdings, Inc.
[email protected]
702-701-9514

Fay Tian
Vice President of Investor Relations
[email protected]
(+1) 626-623-2000
(+86) 13702108000

 

 

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SOURCE Remark Holdings, Inc.

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Bit Digital, Inc. completed the acquisition of $13,902,742 worth of bitcoin miners with total hash rate of 1,003.5 Ph/s

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NEW YORK, Dec. 4, 2020 /PRNewswire/ — Bit Digital, Inc. (Nasdaq: BTBT), a Nasdaq listed Bitcoin mining company headquartered in New York announced that on December 3, 2020, it had completed the acquisition of $13,902,742 worth of bitcoin miners with total hash rate of 1,003.5 Ph/s with certain non-U.S. investors in exchange for an aggregate of 4,344,603 ordinary shares at the price of $3.20 per share, when the purchases were negotiated.

Company Logo (PRNewsfoto/Bit Digital, Inc.)

The closing of the acquisition represents the total hash rate of the Company increase by approximately 1,003.5 Ph/s from 1,250 Ph/s to 2,253.5 Ph/s. The total 17,996 miners acquired include 7,025 Antminer S17+, 9,110 Antminer T17, 195 Antminer S17E, 32 Antminer S17Pro, 105 Antminer S19Pro, 1,429 Whatsminer M20S, 100 Whatsminer M31S. The average energy efficiency of these miners is 47.45 (+/-5%) joules per terahash (J/TH). With these miners being deployed, the total energy efficiency will be decreased from 61.88 (+/-5%) J/TH to 55.33 (+/-5%) by 10.59%. These miners are distributed in Xinjiang, Sichuan and Inner Mongolia Provinces PRC and are expected to be fully installed before the end of December 2020.

“We are very pleased to announce the completion of the transaction and to issue our shares in exchange for bitcoin miners,” Erke Huang, the Chief Financial Officer of the Company said. “Also, with these miners installed, the utility cost will be further decreased and increase our profit margin.”

Safe Harbor Statement

This press release may contain certain “forward-looking statements” relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements. 

 

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SOURCE Bit Digital, Inc.

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