Financial institutions are increasingly facing serious cybersecurity threats, including the risk of data breaches and the theft of sensitive financial information. One alarming study from Identity Theft Resource found that financial institutions experienced a record 1,579 data breaches in 2017 -- a 44% increase over 2016’s already record breaking numbers.
Hedge funds are frequently targeted with malicious cyber attacks due to the sensitive client data and proprietary trading algorithms they store -- both of which are particularly enticing to hackers. To address this growing concern, Crystal Financial Institutions, a division of Alliant Insurance Services, is announcing a new cyber solution specially tailored to hedge funds that addresses numerous aspects of cyber risk management, including security management, insurance, crisis management and legal support.
Cyber Risk 360° provides powerful coverage for modern risks. It includes a cyber insurance policy that has an available coverage extension for fee income related to unplanned redemptions. As one of the industry’s first solutions to offer this unique extension, it allows fund managers to recoup lost management fee income attributed to a cyber breach event. Other features of Cyber Risk 360° include cyber extortion and data loss restoration, 24/7 claims response and dedicated loss recovery services.
To develop the new Cyber Risk 360° solution, Crystal Financial Institutions worked with industry leaders in the insurance underwriting, legal, compliance, cyber defense and information technology fields, including cybersecurity firm BlueVoyant, boutique law firm Bohrer PLLC and Everest Insurance®.
Cyber Risk 360°’s integrated suite of services protects hedge funds against sophisticated cyber attacks by providing clients with:
- Cyber Preparedness Evaluation: An assessment of the current state of cybersecurity and crisis management programs and development of a plan to resolve any deficiencies.
- Insurance Placement: A cyber insurance policy underwritten by Everest Insurance®, offering an extension of coverage for unplanned redemptions.
- Security Management: Continuous 24/7 system monitoring to identify and address cyber threats and offer enterprise risk advice to ensure cybersecurity policies are implemented and updated continuously.
- Incident Response & Crisis Management: In the event of a cyber breach, the team assists with managing the investigation and response from both a strategic and operational perspective, providing a breach coach for around-the-clock support.
- Legal Counsel: Evaluation of policies, procedures and incident response plans as well as liaising with regulatory and governmental agencies.
“The potential ramifications following a cyber attack are immeasurable. We noticed a need in the insurance industry for an end-to-end solution that addresses all aspects of an attack or breach on a hedge fund,” said Ron Borys, Managing Director at Crystal Financial Institutions. “We’ve brought together firms who have specialized experience in the alternative asset management space to offer this new solution, bringing a variety of perspectives to the table.”
“Our mission is to protect clients around the world from increasingly sophisticated cyber attacks that threaten their business,” said Jim Rosenthal, CEO at BlueVoyant. “In partnering with Crystal Financial Institutions, we’ve created a solution that will enable hedge funds to protect their data and sensitive information from outside attacks.”
“Cybersecurity is the new risk management frontier for hedge funds,” said Jeremy I. Bohrer, Managing Partner at Bohrer PLLC. “Getting it right has become a baseline expectation for investors – getting it wrong can ruin your business. The only way to deal with this pressing issue is to address it holistically with partners who understand the hedge fund business.”
Crystal Financial Institutions, BlueVoyant, Bohrer PLLC and Everest will host an educational event on cybersecurity risks for hedge funds on October 10 in New York City. The event will feature commentary from top experts in the insurance and cybersecurity spaces, an introduction to Cyber Risk 360°, and a keynote address by Jim Rosenthal, CEO of BlueVoyant and former COO of Morgan Stanley.
About Crystal Financial Institutions
Crystal Financial Institutions, a division of Alliant Insurance Services, is the home for talented insurance professionals: creative, committed to their clients and driven to deliver extraordinary results. Crystal Financial Institutions drives the strategy and execution behind insurance programs for traditional and alternative investment managers, broker-dealers and banking institutions. As respected leaders in the space, we are recognized for an analytical approach to evaluating exposure, creating custom-designed solutions, and by agile responsiveness to the ever-changing dynamics of an industry buffeted by regulatory change and market volatility.
About BlueVoyant
BlueVoyant is an analytics-driven cybersecurity company whose mission is to protect businesses of all sizes against agile and well-financed cyber attackers by providing unparalleled visibility, insight and responsiveness. BlueVoyant provides Advanced Threat Intelligence, Managed Security Services and Incident Response through offices in the United States, the United Kingdom, Israel and Spain.
About Bohrer PLLC
Bohrer PLLC is a boutique law firm that resolves complex issues at the nexus of business and law as a trusted advisor to clients. Led by a former hedge fund COO and General Counsel, a former federal and state prosecutor and an experienced deal lawyer, our team brings extensive first-hand knowledge of crisis, enterprise, and legal risk management. We counsel hedge funds, investors, and high profile individuals on critical matters ranging from cybersecurity to white collar defense with commercial acumen and a pragmatic approach.
About Everest Insurance®
Everest Insurance® markets property, casualty, specialty and other lines of admitted and non-admitted direct insurance on behalf of Everest Re Group, Ltd., and its affiliated companies. Everest Insurance® maintains a deep product line and the knowledge and experience to put its products to work for our clients. We capitalize upon our global reach, flat organizational structure, financial strength, strong balance sheet, unique and scalable infrastructure, and talented team of insurance professionals to set us apart. Everest Insurance® is committed to being timely in our response, creative in our offering and diligent in our effort to achieve mutual success with our business partners. Additional information on Everest Re Group companies can be found at the Group’s web site at www.everestre.com.All issuing companies may not do business in all jurisdictions. This literature is descriptive only. All coverage is subject to the language of the policy as issued. Everest Insurance® is a registered service mark of Everest Reinsurance Company.
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