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Insurers run from ransomware cover as losses mount

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November 19, 2021

By Carolyn Cohn

LONDON (Reuters) – Insurers have halved the amount of cyber cover they provide to customers after the pandemic and home-working drove a surge in ransomware attacks that left them smarting from hefty payouts.

Faced with increased demand, major European and U.S. insurers and syndicates operating in the Lloyd’s of London market have been able to charge higher premium rates to cover ransoms, the repair of hacked networks, business interruption losses and even PR fees to mend reputational damage.

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But the increase in ransomware attacks and the growing sophistication of attackers have made insurers wary. Insurers say some attackers may even check whether potential victims have policies that would make them more likely to pay out.

“Insurers are changing their appetites, limits, coverage and pricing,” Caspar Stops, head of cyber at insurance firm Optio, said. “Limits have halved – where people were offering 10 million pounds ($13.50 million), nearly everyone has reduced to five.”

Lloyd’s of London, which has around a fifth of the global cyber market, has discouraged its 100-odd syndicate members from taking on cyber business next year, industry sources say on condition of anonymity. Lloyd’s declined to comment.

U.S. insurer AIG also said in August it was cutting cyber limits.

Ransom software works by encrypting victims’ data and typically hackers offer victims a passcode to retrieve it in return for cryptocurrency payments.

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It has become the attack of choice for cyber criminals, who previously favoured stealing data and selling it to third parties.

Suspected ransomware payments totalling $590 million were made in the first six months of this year, compared with the $416 million reported for the whole of 2020, U.S. authorities said in October.

In one of the biggest heists, a ransomware attack on Colonial Pipeline in May shut the largest fuel pipeline network in the United States for several days.

U.S. cyber insurers’ profits shrank in 2020, insurance broker Aon found. Combined ratio – a measure of profitability in which a level of more than 100% indicates a loss – climbed by more than 20 percentage points from 2019 to 95.4%.

While insurers struggle to cope, companies are under-insured.

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“It’s very unlikely people are getting the same limits – if they are, they are paying an extraordinary amount,” David Dickson, head of enterprise at broker Superscript, said.

Dickson said one technology client had previously bought 130 million pounds of professional indemnity and cyber cover for 250,000 pounds. Now the client could only get 55 million pounds of cover and the price was 500,000 pounds.

Insurers who issued $5 million cyber liability policies last year have scaled back to limits of between $1 million and $3 million in 2021, a report last month by U.S. broker Risk Placement Services (RPS) found.

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A European Union report released in October said the COVID-19 pandemic and rise of home working had emabled cyber criminals to flourish.

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Meanwhile, cyber security firm Coveware likened the 90%-plus profit margin from ransomware attacks in 2021 to the gains Colombian cocaine cartels made in 1992.

Where hackers previously took a scattergun approach with methods such as sending out thousands of phishing emails, they have become more targeted, reading balance sheets and focusing on specific sectors.

Tom Quy, cyber practice leader at reinsurance broker Acrisure Re, said attacks were moving away from healthcare facilities and municipalities – which have weak IT controls but also little money – to manufacturing or logistics companies.

Such firms have deep pockets and cannot afford extended outages to fix their systems, so would rather pay ransoms, especially if they have insurance to cover them.

“We advocate to everyone you don’t disclose your insurance because that’s crucial to your business,” Scott Sayce, global head of cyber at Allianz Global Corporate & Specialty, said.

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Premium rates have almost doubled in the United States and jumped by 73% in Britain as a result of the frequency and severity of ransomware attacks, insurance broker Marsh said. RPS said rates for some policies had risen by as much as 300%.

Where ransom payments were typically $600 a few years ago, they now are as high as $50 million, said Michael Shen, head of cyber and technology at insurer Canopius, and insurers are sometimes asking policyholders to pay half of the ransom.

The United States and France are among countries particularly concerned about ransom payments, industry sources say.

The FBI says it does not support paying ransoms, while a few U.S. states are considering banning ransomware payments by municipalities.

But insurers, while less willing to provide large amounts of cover, say failing to pay ransoms could backfire.

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“Of course no-one wants to pay criminals,” Adrian Cox, CEO of insurer Beazley told the Reuters. “At the same time, if you ban it … you could cripple a lot of businesses whose systems have been disabled.”

($1 = 0.7406 pounds)

(Editing by Barbara Lewis)

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Tesla sold 52,859 China-made vehicles in November – CPCA

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December 8, 2021

BEIJING (Reuters) – U.S. electric vehicle maker Tesla Inc sold 52,859 China-made vehicles in November, including 21,127 for export, the China Passenger Car Association (CPCA) said on Wednesday.

Tesla, which is making Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 54,391 China-made vehicles in October, including 40,666 that were exported.

Chinese EV makers Nio Inc 10,878 cars last month, a monthly record high, and Xpeng Inc delivered 15,613 vehicles. Volkswagen AG said it sold over 14,000 ID. series EVs in China in November.

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CPCA said passenger car sales in November in China totalled 1.85 million, down 12.5% from a year earlier.

(Reporting by Sophie Yu, Brenda Goh; editing by Jason Neely)

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Renault Zoe goes from hero to zero in European safety agency rating

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December 8, 2021

By Nick Carey

LONDON (Reuters) – French carmaker Renault on Wednesday received a blow for its popular Zoe electric model, as the European New Car Assessment Programme (NCAP) gave it a zero-star safety rating in tests that are standards for Europe.

The carmaker, which is cutting costs and working to turn around its performance after overstretching itself over years of ambitious global expansion, also received a one-star rating for its electric Dacia Spring model.

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Euro NCAP said the latest Zoe had a worse seat-mounted side airbag than earlier versions. Euro NCAP noted the Renault Laguna had been the first car ever to receive a five-star rating in 2001.

“Renault was once synonymous with safety,” Euro NCAP secretary general Michiel van Ratingen said in a statement. “But these disappointing results for the ZOE and the Dacia Spring show that safety has now become collateral damage in the group’s transition to electric cars.”

In the year through October, the Zoe was the third top-selling fully-electric car in Europe, behind Tesla’s Model 3 in top place and Volkswagen’s ID.3.

In a press release titled “Hero to Zero,” UK insurance group Thatcham Research noted the Zoe had initially received a five-star rating back in 2013.

“It’s a shame to see Renault threaten a safety pedigree built from the inception of the rating,” said Matthew Avery, Thatcham’s chief research strategy officer and a Euro NCAP board member.

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Eleven cars received ratings in Euro NCAP’s final round of tests for 2021, which did not include Tesla models.

A number of other vehicles received five-star ratings, including BMW’s electric iX, Daimler’s electric Mercedes-Benz EQS, Nissan’s Qashqai and Volkswagen’s VW Caddy.

(Reporting By Nick Carey; Editing by Bernadette Baum)

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Weibo shares close down 7.2% in Hong Kong debut

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December 8, 2021

By Scott Murdoch

HONG KONG (Reuters) -Chinese social media giant Weibo Corp’s shares closed 7.2% below their issue price in Hong Kong on Wednesday, as it became the latest U.S.-listed China stock to seek out a secondary listing closer to home.

The Hong Kong debut was in line with a fall in Weibo’s primary listing in New York after a torrid week for U.S.-listed China shares, which are facing greater U.S. regulatory scrutiny and also under pressure from Chinese authorities.

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Weibo, which raised $385 million for its Hong Kong listing, opened at $256.20 and closed at HK$253.2 after a volatile debut session.

The stock had been priced at HK$272.80 each in its secondary listing in which 11 million shares were sold.

“For Weibo, it’s a matter of timing. The Hong Kong market had started to rebound this week and now we are seeing some softness emerging in the market,” said Louis Tse, Wealthy Securities director in Hong Kong.

Weibo’s fall came as Hong Kong’s Hang Seng Index closed Wednesday up 0.06% while the Tech Index was 0.03% higher.

Some major stocks such as Alibaba Group Holdings, down 4.35%, were off sharply as sentiment towards tech majors remains fragile.

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“The listing market in Hong Kong is very lukewarm right now,” said Dickie Wong, Kingston Securities executive director.

“Plus, there is regulatory pressure from the (U.S. Securities and Exchange Commission) on Chinese companies to disclose basically everything within three years.

“So there is a major trend that most of the U.S.-listed Chinese companies will seek secondary or dual primary in Hong Kong so they can exit the U.S. market if they need to.”

Ride-hailing giant Didi Global decided last week to delist from New York https://www.reuters.com/technology/didi-global-start-work-delisting-new-york-pursue-ipo-hong-kong-2021-12-03, succumbing to pressure from Chinese regulators concerned about data security and denting sentiment toward Chinese stocks.

Hong Kong and China’s mainland STAR Market have attracted $15.2 billion worth of secondary listings from U.S. listed Chinese companies so far this year, according to Refinitiv data.

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“The moves are probably based on the increasing recognition that the U.S.-China decoupling will not stop and will proceed steadily,” said LightStream Research analyst Mio Kato, who publishes on Smartkarma.

“I would expect a continuous flow of listings from New York to Hong Kong over the next year or two.”

The U.S administration is progressing plans to delist Chinese companies if they do not meet the country’s auditing rules, which could affect more than 200 companies.

Chinese companies https://www.reuters.com/business/us-sec-mandates-foreign-companies-spell-out-ownership-structure-disclose-2021-12-02 that list on U.S. stock exchanges must disclose whether they are owned or controlled by a government entity, and provide evidence of their auditing inspections, the Securities and Exchange Commission (SEC) said last week.

(Reporting by Scott Murdoch and Donny Kwok; editing by Richard Pullin and Louise Heavens)

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