Tag Archives: entertainment

New Vulnerabilities in the Connected World

Many exciting TV shows and movies include hacking as standard fare – overriding security systems, changing traffic lights, causing explosions, even committing untraceable murders. Hacking makes for interesting entertainment. The frightening part? It’s all possible.

The digital connections in our world are multiplying faster than we realize. It is difficult to even think of anything that cannot be connected. Connected cars and connected homes are advancing by leaps and bounds. Livestock such as cattle and sheep are tracked electronically, and your dog or cat may have an embedded chip. Even bees are being outfitted with tiny RFID backpacks. Roads, buildings and transportation systems are beaming real-time information to servers in the cloud. The rapid rise of wearables, hearables, implantables and personal medical devices means that an increasingly large number of people are connected.

The increasingly connected world provides terrific opportunities to improve life on earth. But with opportunity often comes threat – in this case the threat of hacking. And the facts are scarier than the fiction.

The word “hacking” conjures up images of millions of credit cards being stolen from banks or retailers, or perhaps the stealing of corporate secrets or even cyber-espionage between countries. Insurers have been at the forefront of this battle, designing cyber risk coverages and policies to help individuals or businesses address the financial exposure of hacking. But the connected world increases the hacking potential in incalculable ways. Here are just a few examples of other existing vulnerabilities:

  • Connected Cars: Wired magazine hired two hackers to demonstrate how a Jeep Cherokee could be hacked. The hackers showed that they could take over simple tasks like locking or unlocking doors, and could also take over the steering wheel and drive the car over an embankment.
  • Toys: The new Hello Barbie Doll is connected to the Internet and can be hacked to listen in to the conversations in your home.
  • Laptops and Smart TVs: Bad guys can remotely take over the camera and audio for these devices to spy on the laptop user or anyone viewing a Smart TV.
  • Medical Devices: Insulin pumps and other medical devices can be hacked to alter their treatment. For example, the insulin dosage can be changed, resulting in insulin shock and even death.
  • Wearables: Connected watches, shoes and health monitoring devices are notoriously exposed, especially because they often collect very private, personal information.

Fortunately many of these incidents were the work of white hat hackers hired to expose weaknesses. Unfortunately, most of the exposures still exist, and every new chip, sensor and connected device becomes a target. There are several key implications for insurers and individuals:

  • Cyber risk insurance must greatly expand. The industry has done a yeoman’s job thus far in helping to address financial exposures. But now, whole new classes of cyber threats must be evaluated and addressed.
  • Loss control must increasingly consider cyber safety. Individuals and businesses need advice on how to protect their valuable digital information, related to both traditional and new sources.
  • Insurers must consider their own growing cyber vulnerabilities. As companies employ drones, IoT devices and wearables for employees, they must understand and address the potential exposures from theft of the related information.
  • The industry must actively participate in cyber initiatives. New technology defenses, law enforcement approaches and regulation will all play a role in thwarting hackers. Insurers should provide expertise, investment and support to advance important initiatives.

It’s an exciting time to be alive. And it’s an exciting time to be in the insurance industry. Technology, with all of its benefits, is advancing fast – but faster than we can regulate and manage it.

New risks and threats from connected devices definitely exist. But connected devices also provide great opportunities for the insurance industry to play to its strength – protecting valuable assets, promoting safety and providing peace of mind to individuals and businesses alike.

Who Pays When a Show Is Canceled?

Picture the scene: You’ve been waiting to buy tickets to see your favorite band, you finally get hold of some – you’re so excited to see them and then they suddenly pull out. What happens next? Usually, fans are left devastated, show organizers have nightmares and an emergency call is put in to the insurers.

So, who picks up the bill in this situation? Well, there is a good chance it’s us — Robertson Taylor is in the business of live entertainment insurance and has brokered nine of the 10 highest-grossing music tours ever. The cancellation of a tour or a band’s appearance at a festival is always set to hit the headlines, and it will normally result in a call to us.

When a band pulls out

When this happens, you need to consider the type of event; for example, if it’s a festival, a band’s cancellation can have little or no impact because tickets can be sold out within minutes of going on the sale, with no band or artist line-up being mentioned — a cancellation won’t stop the event from happening, but partial refunds may have to be considered. Also the band may lose its guarantee. A concert, however, is different. More stakeholders are affected, like the promoter, the agent and the venue.

The tour

Touring is where things get tricky. Decisions rely heavily on the accuracy of the financial forecast generated for the tour, and the size of the claim depends on the size of the event and the artist involved. The largest one-off show we arranged cover for was insured for $22 million, which is still the largest non-appearance policy placed for one show.

On a large production where there is a substantial set construction, and a large amount of crew, the costs can be huge, even just to reschedule. We’ve had an artist who had to cancel and reschedule several shows, and the claim was tens of millions of dollars because it required the rehiring of venues, crew, equipment and so on.

How much is it to insure a band?

It’s all about risk. If insurers think a particular artist is high-risk, then this will be reflected in the cost to insure that artist — as with any type of insurance. To gauge risk, we look at a number of factors, including the history of touring and any previous losses, health issues, logistical issues such as the tour routing, what happens if key individuals or equipment is not available, etc. Sometimes, insurance might not be available for an artist who has too much of a “history.”

The call

This can happen at any time of day or night; I remember a number of times I have been on the phone in the early hours of the morning because there was an urgent incident on the other side of the world. It’s important to get on top of the situation quickly, understand what the issue is and then decide what needs to be done to mitigate the situation. If it looks like there could be a big loss involved, then we may need to reach out to the loss adjuster, but they don’t always appreciate getting a call at 3 a.m.!

Throughout the process, it’s important to continually communicate with the client. We operate in an immediate business where your expertise is required at that particular moment in time. Although we have been in this industry for 38 years, and undoubtedly the music scene has changed, insuring it still has the same unmistakable ability to keep you on your toes.

Bizarro World: Where Buying Can Be Fun

In the Bizarro world of insurance, the product that people buy hoping they never use it is replaced with products that people buy via an interactive and engaging learning experience.

Last Wednesday, Google opened its first retail store in London: a pop-up store within a British electronics retailer, called Currys PC World. The Google shop lets people play, experiment and learn about all Google has to offer. In a sense, the store is an interactive billboard that places profits at the backseat and lures customers in via a promise to entertain.

This concept of “play over purchase” isn’t unique, and can be found in Apple’s and Samsung’s business models. In fact, only two years ago, Samsung looked to emulate Apple’s success in the U.S. by launching its own chain of mini-stores in partnership with Best Buy.

Surely there is some room for play, not just purchase, in our industry.

To get a better idea of how this would work in Bizarro insurance world, picture a retail destination with insurance geniuses standing by, ready and eager to engage customers in the insurance experience all the way from consulting on insurance products to simulating claim-handling and the latest telematics gadgets. These insurance geniuses will welcome consumers and listen to them, to better understand the right combination of products and features to offer. Later, the geniuses will point consumers to different stations, such as “Seriously Real,” sponsored by Cyberith, where consumers can enter the virtual world of operating drones for disaster support, or “Hot Quotes,” sponsored by Bolt, where consumers can obtain auto insurance quotes faster than Jimmy John’s delivery guy can make a sub.

The result will be a house of insurance brands that come together under one roof to clearly communicate the value of insurance for the sake of a branded customer experience. Yes, I’m referring to the two most overused words in this industry – customer experience – which until now were largely defined by an automatic renewal letter sent once a year or perhaps an unused, “downloaded and forgotten” app.

We should also draw on the underused word “ecosystem”: in this setting, defined as a network of carriers, vendors and insurance startups that collaborate to educate and engage around insurance products via a one-stop shop.

To be continued when we revisit the Bizarro world of insurance….