U.S. small businesses report an increase in suspicious emails over the past year, a cyber survey by HSB shows, and employees are taking the bait as they fall for phishing schemes and transfer tens of thousands of dollars in company funds into fraudulent accounts.
“Whether it’s a phishing scheme, fraud or malware, most cyber-attacks start with an email,” said Timothy Zeilman, vice president for HSB, part of Munich Re. “Even companies that have information security training and fairly savvy employees fall victim to these deceptions.”
Over half of business executives (58 percent) polled by Zogby Analytics for HSB, a leading provider of cyber insurance and services, said suspicious emails had increased in the past year.
More than a third (37 percent) of the organizations received an email from someone pretending to be a senior manager or vendor requesting payments.
Almost half of employees receiving those emails (47 percent) responded by transferring company funds, resulting in losses most often in the $50,000 to $100,000 range (37 percent) and rarely less than $10,000 (only 11 percent).
The scam is convincing because cyber thieves in many cases gain access to business email accounts and assume the false identities of company managers.
With millions of Americans working remotely from home since the outbreak of the coronavirus, business email schemes could become an even bigger threat, Zeilman said.
“It’s more important than ever to pay attention to safe cyber security practices and make sure you verify requests for payments,” he said. “Don’t rely on email alone – call the person and confirm the payment is legitimate before releasing any funds.”
Zogby Analytics was commissioned by HSB to conduct a survey in October 2019 of 505 small to medium-sized businesses across the United States. Seventy-five percent of the sample had annual revenue under $5 million and less than 100 employees. The final sample contained 41 percent of the businesses with fewer than 25 employees. Based on a confidence level of 95 percent, the margin for error is plus or minus 4.4 percentage points. That means all other things being equal, the identical survey would have results within the margin of error 95 times out of 100.
Hartford Steam Boiler (HSB)
HSB, part of Munich Re, is a multi-line specialty insurer and provider of inspection, risk management and IoT technology services. HSB insurance offerings include equipment breakdown, cyber risk, specialty liability and other coverages. HSB blends its engineering expertise, technology and data to craft inventive insurance and service solutions for existing and emerging risks posed by technological change. Throughout its 150-year history HSB’s mission has been to help clients prevent loss, advance sustainable use of energy and build deeper relationships that benefit business, public institutions and consumers. HSB holds A.M. Best Company’s highest financial rating, A++ (Superior). For more information, visit www.hsb.com and connect on LinkedIn, Twitter and Facebook.
Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The group consists of the reinsurance and ERGO business segments, as well as the capital investment company MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. It offers customers financial protection when faced with exceptional levels of damage – from the 1906 San Francisco earthquake through to the 2019 Pacific typhoon season. Munich Re possesses outstanding innovative strength, which enables it to also provide coverage for extraordinary risks such as rocket launches, renewable energies, cyberattacks, or pandemics. The company is playing a key role in driving forward the digital transformation of the insurance industry, and in doing so has further expanded its ability to assess risks and the range of services that it offers. Its tailor-made solutions and close proximity to its customers make Munich Re one of the world’s most sought-after risk partners for businesses, institutions, and private individuals.
Zogby Analytics is an international research firm, providing clients with information and knowledge critical for making informed strategic decisions since 1984. The firm conducts multi-phased opinion research with state-of-the-art opinion research capabilities and objective analysis and consultation for banking and financial services institutions, insurance companies, hospitals and medical centers, retailers and developers, religious institutions, cultural organizations, colleges and universities, IT companies and federal agencies.