In this episode of A.M.BestTV, Christopher Giovino, director, forensic services, AON Global Risk Consulting, states insurers are rewriting crime policies in response to “whale phishing,” in which criminals fraudulently lure organizations into transferring money or surrendering important information.
Giovino addresses what exactly ‘whale phishing’ is. “It is a form of computer based fraud that involves executives, people in finance and the transferring of cash, typically by wire from the United States or off-shore to another off-shore account and then to another off-shore account,” he said. “It is also called social engineering, and between 2013 and 2014, it cost companies over $214 million in losses.”
Giovino continues as to how this fraud is executed. “The financial person (responsible for wire transfers) receives an e-mail from someone representing himself as an executive in another company, requesting that a specific person wire transfer money to a legitimate bank, and since the e-mail has some familiarity in it to the receiver, he or she wires the funds believing the request to be legitimate. Once the funds reach the legitimate bank, within a day they are sent to an unknown account in a foreign country and disappear.”
Giovino acknowledges that the industry is unsure how these scammers are getting their information; however, the industry is responding by rewriting crime policies and offering riders.
Source: A.M. Best Company