Cyber risk to HNW individuals is growing

When US actress Bella Thorne was blackmailed recently by iCloud hackers, she chose to release stolen nude photos on Twitter instead of paying a ransom. It follows similar hack-beating action by rock band Radiohead after thieves stole 18 hours of music from singer Thom Yorke’s PC. Rather than paying the £120,000 demanded by the extortionist, the band instead made the demos and live recordings freely downloadable for 18 days.

High net worth (HNW) insurance packages are increasingly offering personal cyber insurance as an additional cover, as it becomes clear that wealthy individuals are a popular target for hackers and cyber criminals. Yet many fail to see such attacks as a threat to their reputation, despite the fact they can result in blackmail and extortion.

“Brokers need to get the message out to customers about personal cyber cover,” said Lycetts private client account executive Guy Baxter. 

“Some high net worth providers are building personal cyber cover into their policies, thankfully. Some are including it for free and others charge an additional premium. However, the take-up is low where they have to pay more.

“There are losses,” he continues. “A solicitor client of mine was having building work done on their home and they received an email from their builder with an invoice for £5,000, which they paid. It transpired that the email had been intercepted from the builder and their bank details changed.” 

Hacking or scam?

He said it was still unclear whether the builder’s computer was hacked or whether it was a ‘social engineering’ scam – a confidence trick used to extract confidential data such as bank details. “They sadly didn’t have personal cyber cover, but I’m certain this would have been covered if they had,” he said.

 More than one-quarter of international HNW families and firms managing their assets have suffered cyber attack breaches, according to research by Campden Wealth and Schillings, with more than three-quarters of those falling prey to a phishing or spear phishing attack. Despite the risks, around 40% lack dedicated cyber security or professional cover to manage protection. 

Sara Simmons, Covéa Insurance head of HNW and operational governance, said: “We built cyber cover into our mid- and HNW products 18 months ago. 

“We’ve automatically included it because it is a complex risk that can be difficult to explain to the customer. Claims so far have been reasonably limited, but having the cover there has meant we’ve been able to remedy any incident quickly.”