REG Reviews
REG Reviews – April 2022
1st April 2022
REG Reviews
1st April 2022
This month we look at the largest fine Lloyd’s have filed in 336 years, warnings regarding Russian computer technology and REG welcomes three new employees.
Read these articles and many more, along with our usual updates from REG and the REG Tech sector…
Lloyd’s of London has handed down its largest fine in its 336 years history against Atrium due to the mishandling of a harassment case and tolerating ‘inappropriate’ staff events. Lloyd’s announced that it had fined more than £1m due to “serious failures” by the firm, which was shown to have tolerated discrimination, harassment and bullying over a number of years.
One of the charges related to “a systematic campaign of bullying” against a junior staffer by a male employee, whose behaviour was well known at the firm, and known by senior managers who failed to take adequate steps to address the problem. In relation to the bullying case, which took place during the same period, Atrium also failed to protect the junior staff member or the employee who complained. The employee was told to keep quiet about the case. Instead, Atrium negotiated a settlement package with the bullying employee and allowed him to resign rather than face any repercussions.
“Lloyd’s expects all participants in the market to meet the highest standards of professionalism and we are continuing to use our powers to intervene when needed,” Lloyd’s chief executive, John Neal stated.
According to a business review conducted by Harvard, cyber-Insurance is more difficult for companies to find than it was a year ago and is only likely to get harder. While cyber insurance is a must-have for businesses, the explosion of ransomware and cyberattacks, fuelled by current world events, means it is also becoming a less appealing business for insurers.
The average ransom payment shot up by 82% from 2020 to 2021. By the middle of last year, the number of ransomware attacks were up by more than 150% over the entirety of 2020. As a result, this has had direct implications for the insurance industry. The increase in attacks, and therefore pay-outs, has meant greater losses for insurers which has lessened their appetites for this emerging and often volatile kind of business.
For cyber insurance to remain a viable business, insurers and their customers are in dire need of a new pool of capital. This will help them address the risk of large cyber catastrophes; events that hit multiple companies and cost insurers hundreds of millions of pounds. A new pool of capital could help insurers manage their risk better and give them more breathing room to write more cyber insurance policies.
REG has completed the automation of Belgium Regulator, the Financial Services and Markets Authority. REG customers will be able to access the full regulatory profile of over 10,000 authorised firms, while the REG Network will carry out daily checks on profiles and create alerts for critical changes.
To access this data and if you want to find out more about how the REG Technologies software can assist your business click here to find out more!
In last month’s REG Review we discussed how the coming months are vital for financial institutions as they prepare for European environmental, social, and governance (ESG) regulatory compliance. This month we have an update as the Broker Summit attendees warn brokers that “doing nothing on ESG is the biggest risk”.
In a panel session at the event Carl Gurney, renewable energy director at Marsh Commercial and Roger Jackson, partner and insurance ESG lead for the UK at KPMG, discussed what brokers should be doing to be ESG friendly. Jackson told attendees to start by thinking about their own operations and what is being done from an ESG perspective. During the summit Jackson stated, “There is a lot of good work that is being done out there and that is sometimes not appreciated”.
The British Insurance Brokers Association (BIBA) has added to its commercial flood insurance scheme meaning they can now provide cover for businesses with less than £1m in assets, such as restaurants. The product, created alongside Mi Commercial Risks, provides “flood only” cover with either a £25k or £50k limit, in total during the period of insurance. The product is designed to be bought alongside a standard commercial package policy to provide some flood cover if there is a gap.
Not only does the product cover flood damage, it also covers any additional costs including replacement of property, clean up, and moving to or from additional premises, along with securing the premises, defending against further flood damage and additional staff costs. The claims process with the policyholder is much quicker and allows them to be in control of how they best use the compensated funds to get their business back up and running again.
On Tuesday 29th March 2022, Britain’s Cybersecurity Centre said organisations providing services related to Ukraine, or critical infrastructure, should reconsider the risk associated with using Russian computer technology in their supply chains. This was also applied to organisations who could represent a PR “win” for Russia if compromised.
“We have no evidence that the Russian state intends to suborn Russian commercial products and services to cause damage to UK interests, but the absence of evidence is not evidence of absence,” said the National Cyber Security Centre (NCSC), (part of Britain’s GCHQ eavesdropping intelligence agency), in a blog post.
The post released by the NCSC also warned, “if you are more likely to be a target for the Russian state because of what’s going on, then it would be prudent to consider your reliance on all types of Russian technology products or services, including but not limited to cloud-enabled products such as (antivirus software)”.
During the UK Broker Summit this month, Michal Sicsic, a senior executive in the field of risk and regulation in the financial services sector, made the announcement that the Financial Conduct Authority (FCA) will be cracking down on brokers who will increasingly come under the microscope. Speaking to delegates at the UK Broker Summit last week, Sicsic, former head of supervision for general insurance at the FCA, stated: “2021 has been the year of change in Insurance Regulation, 2022 is the year where the change bites.”
The decision has come as the last two years have been extremely busy in terms of regulatory compliance change. The FCA want to ensure that brokers are complying with new regulations, and if not, penalties will be given. You have been warned!
Darren Adams joins the Product and Technology team as a full stack developer, bringing 20 years of experience to the role.
“I’ve been software engineering for about 20 years and have most recently been working for a US company dealing with labour market data, building a solution for the US education market as well as a product to aid reskilling in the wake of Covid.
Darren is joined by Daniel Carpenter in our data processing team and Alicja Starzycka a front-end developer.
Zurich’s white ‘Z’ logo on a blue background has been removed from its social media channels after the Z symbol became a pro-war symbol in Russia following its invasion of Ukraine. The Telegraph reported that the insurer is considering scrapping the logo in its entirety. Zurich told the paper that there were concerns its own Z logo may be misinterpreted and for that reason they were “temporarily removing” it from channels such as Twitter.
“We are temporarily removing the use of the letter ‘Z’ from social channels where it appears in isolation and could be misinterpreted,” the company told Reuters in a statement.
Zurich Insurance said earlier this month that it was no longer taking on new domestic customers in Russia and will not renew existing local business.
A hacking gang named Lapsus$ has been making a name for itself with a string of cyberattacks against a range of high-profile targets including Microsoft Corp. and Okta Inc. The aim of the Lapsus$ campaign appears to be soliciting ransom payments, with threats to leak stolen information if its extortion demands aren’t met.
On Thursday 24th March 2022, the City of London Police announced they had arrested seven people following a series of hacks against Okta Inc. by the group: Lapsus$. The ransom-seeking gang had posted a series of screenshots of Okta’s internal communications on their Telegram channel late on Monday 21st March 2022. Detective Inspector Michael O’Sullivan said, “seven people between the ages of 16 and 21 have been arrested in connection with this investigation and have all been released under investigation.,”.
News of the digital breach knocked Okta shares down about 11% amid criticism of the digital authentication firm’s slow response to the intrusion. Shares of Okta were trading down 4.8% by Thursday 24th March 2022; just three days after the leak.
The UK Government have revealed that they will soon regulate the cryptocurrency market. The decision has come after complaints that the sector lacks legal clarity and is a sector that has so far been mostly lacking in regulation. The UK Government plan on achieving this by focusing on a fast-growing type of token known as “stablecoins”.
Stablecoins have seen exponential growth in terms of usage over the past few years. Tether, the world’s largest stablecoin, now has a total circulating supply of more than $80 billion, up from around $4 billion two years ago. British Finance Minister, Rishi Sunak, is expected to make an announcement in the coming weeks about the new regulatory regime for cryptocurrency.
