Fraudulent instruction emerges as significant new cyber threat

New York, Feb. 02, 2018 -- Claims data recorded by Beazley, the specialist insurer and leading provider of cyber insurance, indicates that organizations are facing an increased threat to their operations from fraudulent instruction scams.

Fraudulent instruction incidents reported to Beazley Breach Response Services (BBR Services) quadrupled in 2017, with policyholders incurring losses ranging from a few thousand dollars up to $3 million.  With claims amounts in 2017 averaging $352,000, fraudulent instruction has rapidly become a significant financial threat to many organizations.

Cyber-criminals are using ever-more sophisticated methods to exploit human weaknesses in an organization’s cyber-defenses. Under fraudulent instruction scams, criminals use hacking and phishing techniques to accumulate information that allows them to send plausible-looking requests to transfer funds to bogus accounts. In addition to losing money, organizations may also have to conduct exhaustive systems analysis to ensure that individuals’ personal and private data has not been compromised.

The top three industry sectors affected in 2017 were professional services (22% of the total reported to Beazley), financial services (21%) and retail (12%), but incidents are growing across all sectors, and in particular where single large transactions, such as real-estate purchases, are involved.

Katherine Keefe, global head of BBR Services commented: “Cyber-criminals are finding new ways of getting organizations to part with their hard-earned cash.  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.”

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Note to editors:

Beazley plc is the parent company of specialist insurance businesses with operations in
Europe, the US, Canada, Latin America, Asia, the Middle East and Australia. Beazley manages
six Lloyd’s syndicates and, in 2016, underwrote gross premiums worldwide of $2,195.6 million.
All Lloyd’s syndicates are rated A by A.M. Best. 

 Beazley’s underwriters in the United States focus on writing a range of specialist insurance
products. In the admitted market, coverage is provided by Beazley Insurance Company, Inc.,
an A.M. Best A rated carrier licensed in all 50 states. In the surplus lines market, coverage is provided by the Beazley syndicates at Lloyd’s.

Beazley is a market leader in many of its chosen lines, which include professional indemnity, property, marine, reinsurance, accident and life, and political risks and contingency business.

 For more information please go to: www.beazley.com

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Attachments:

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/cfbd7ddf-8e0c-432d-ae9e-8f565b518288

Eleanor Lewis
Beazley Group
+44 (0)20 7667 0538
[email protected]

Deborah Kostroun
Ketchum
+1 (646) 935 4135
[email protected]