Insurers Eyeing Cyber Coverage

Insurers are eagerly monitoring exponential growth in the tiny cyber coverage market but their lack of experience and skills handling hackers and data breaches may keep their ambitions in check.

High profile cases of hackers seizing sensitive customer data from companies, such as U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.

Increasingly, corporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.

The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.

Those numbers represent a sliver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.

The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.

“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”

Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.

“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.

Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS Labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.

Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target, Neiman Marcus, and other merchants, he added.

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Verizon Wins Top Honors

RootMetrics awarded Verizon Wireless its seal of approval in its latest biannual ranking of wireless network performance in cities across the U.S.

Verizon ranked first or was tied for first in 115 of 125 cities for overall network performance during the first half of 2014, leading all three other national carriers — AT&T, Sprint and T-Mobile.

Sprint didn’t finish first in any of the cities, while Verizon tied with either AT&T or T-Mobile, or both, in 56. That meant that AT&T was the only first place finisher in 59 cities, including major cities such as Cincinnati, Colorado Springs, Colo., Daytona Beach, Fla., Detroit, Los Angeles, Miami, Minneapolis, Nashville, Salt Lake City, San Antonio and Seattle.

RootMetrics found that Verizon finished first in 23 of 50 airport network evaluations for the first half of the year and tied for first in seven out of 50 airports. Verizon won or tied at four major airports: Atlanta, Chicago, Los Angeles and Denver.

Verizon has its 4G LTE network in 500 U.S. cities, providing access to 97% of the U.S. population. RootMetrics used devices capable of connecting to Verizon’s XLTE network, now operating in 300 cities.

XLTE uses AWS spectrum.

RootMetrics is an independent research company that uses testers driving in cars and in stationary locations, both indoors and outdoors, to conduct thousands of tests in each city to evaluate reliability and speed of connections and call, data and text performance. The company uses unmodified smartphones purchased off-the-shelf from operator stores.

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eBay Expands Mobile Shopping

Braintree, the payments gateway owned by eBay Inc, is working on removing a hurdle for e-commerce companies by making it easier for customers to directly pay for products on their smart phones.

The company rolled out a set of tools for software developers on Wednesday that allows businesses to deduct payments directly from a customer’s PayPal account.

The developer kit is the first big push from Braintree since it was bought by eBay for $800 million last year to help PayPal, eBay’s payments division, expand its presence on mobile devices.

Eliminating the need for mobile shoppers to type in their credit card details on their phones should help boost sales, Braintree Chief Executive Bill Ready said in an interview.

This is especially critical as consumers spend more time on their smartphones, a trend that is forcing developers to design a “fundamentally different computing experience” for the smaller screen, Ready added.

Braintree processes payments for businesses including car service Uber and online home-rental marketplace Airbnb.

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Verizon Wants Dish’s Spectrum

Verizon Communications Inc unit Verizon Wireless is in hot pursuit of satellite-TV operator Dish Network Corp’s spectrum to improve wireless internet speeds, the New York Post reported, citing sources familiar with the matter.

The two companies have held informal, early talks about the spectrum, the report said.

In May, Verizon Communications Chief Executive Lowell McAdam shot down rumors that the company was in potential merger talks with Dish.

Federal Communications Commission Chairman Tom Wheeler has proposed restrictions on how much the biggest wireless carriers can bid for in a major auction of TV spectrum scheduled for mid-2015.

A possible merger between Sprint Corp and T-Mobile US Inc could prompt U.S. regulators to rewrite rules they are now considering for the auction.

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Microsoft’s Killswitch Incoming

Responding to mounting  pressure, Google and Microsoft will follow Apple in adding an anti-theft “kill switch” to their smartphone operating systems.

The commitment comes at a time when new data shows a dramatic drop in theft of Apple iPhones and iPads after the September 2013 introduction of iOS 7, which included a kill-switch function that allows stolen devices to be remotely locked and deleted so they become useless.

In New York, iPhone theft was down 19 percent in the first five months of this year, which is almost double the 10 percent drop in overall robberies seen in the city. Over the same period, thefts of Samsung devices — which did not include a kill switch until one was introduced on Verizon-only models in April — rose by over 40 percent.

In San Francisco, robberies of iPhones were 38 percent lower in the six months after the iOS 7 introduction versus the six months before, while in London thefts over the same period were down by 24 percent. In both cities, robberies of Samsung devices increased.

“These statistics validate what we always knew to be true, that a technological solution has the potential to end the victimization of wireless consumers everywhere,” San Francisco District Attorney George Gascon told IDG News Service.

Gascon and New York State Attorney General Eric Schneiderman have been leading a push to get smartphone vendors and telecom carriers to include kill switches in their products as a way to curb phone theft.

The joint work had early success with Apple but other carriers and phone makers dragged their feet. However, resistance to the idea appears to be dropping as several bills that mandate kill switches make their way through state legislatures and the U.S. Congress.

The bills demand a function that would enable a phone owner to remotely delete and disable a phone if stolen. The function could be disabled by consumers before a theft takes place if desired, but crucially new handsets would be supplied with it switched on by default.

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Hackers Going After Traffic Signs

After hackers played several high-profile pranks with traffic signs, including warning San Francisco drivers of a Godzilla attack, the U.S. government advised operators of electronic highway signs to take “defensive measures” to better secure their property.

Last month, signs on San Francisco’s Van Ness Ave were photographed flashing “Godzilla Attack! Turn Back” and highway signs across North Carolina were tampered with last week to read “Hack by Sun Hacker.”

The Department of Homeland Security’s Industrial Control Systems Cyber Emergency Response Team, or ICS-CERT, this week advised cities, highway operators and other customers of digital-sign maker Daktronics Inc to take “defensive measures” to minimize the possibility of similar attacks.

It said that information had been posted on the Internet advising hackers how to access those systems using default passwords coded into the company’s software. “ICS-CERT recommends entities review sign messaging, update access credentials and harden communication paths to the signs,” the agency said in an alert posted on Thursday.

Jody Huntimer, a representative for Daktronics, declined to say if the recent attacks involved the bug reported by ICS-CERT.

“We are working with the ICS-CERT team to clarify the current alert and will release a statement once we have assessed the situation and developed customer recommendations,” Huntimer said via email.

Krebs on Security, a widely read security blog, posted a confidential report from the Center for Internet Strategy, or CIS, which was sent to state security officials. It warned that the pranks created a public safety risk because drivers often slow or stop to view the signs and take pictures.

CIS also predicated that amateur hackers might attempt to hack into other systems in the coming weeks following the May 27 release of “Watch Dogs,” a video game from Ubisoft focused on hacking critical infrastructure.

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More Ransomware Plaguing Android

Android users have been warned again that they too can become victims of ransomware.

A Cryptolocker-style Android virus dubbed Simplocker has been detected by security firm Eset, which confirmed that it scrambles files on the SD cards of infected devices before issuing a demand for payment.

The message is in Russian and the demand for payment is in Ukrainian hryvnias, equating to somewhere between £15 and £20.

Naturally, the warning also accuses the victim of looking at rather unsavoury images on their phone. However, while the source of the malware is said to be an app called “Sex xionix”, it isn’t available at the Google Play Store, which generally means that anyone who sideloads it is asking for trouble.

Eset believes that this is actually more of a “proof of concept” than an all-out attack, and far less dangerous than Cryptolocker, but fully functional.

Robert Lipovsky of Eset said, “The malware is fully capable of encrypting the user’s files, which may be lost if the encryption key is not retrieved. While the malware does contain functionality to decrypt the files, we strongly recommend against paying up – not only because that will only motivate other malware authors to continue these kinds of filthy operations, but also because there is no guarantee that the crook will keep their part of the deal and actually decrypt them.”

Eset recommends the usual – use a malware app. It recommends its own, obviously, and advises punters to keep files backed up. Following such advice, said Lipovsky, ensures that ransomware is “nothing more than a nuisance”.

This is not the first Android cryptolocker style virus. Last month a similar virus was found, which Kaspersky said was “unsurprising, considering Android’s market share”.

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Cheaper Windows Phones Forthcoming

Lower priced smartphones running Microsoft’s Windows Phone operating system are on the way, according to Microsoft.

Speaking at the Computex trade show in Taipei, Microsoft’s Nick Parker, who handles the company’s partnerships with device makers, said the new handsets could be out by the end of the year.

Compared to current models, which are in the “fours, fives and sixes,” he said referring to prices between $400 and $699, the new phones would have price points in the “ones, twos and threes.”

Asked to clarify if he was referring to end-market prices without carrier subsidies, Parker said he was.

He didn’t identify the manufacturers that would be bringing the phones to market, but there’s a good chance they are among nine companies Microsoft signed up to its Windows Phone development program earlier this year.

In addition to existing partners Nokia, Samsung, HTC and Huawei, Microsoft added Foxconn, Gionee, Lava (Xolo), Lenovo, LG, Longcheer, JSR, Karbonn and ZTE.

Some of the new partners have significant market share in developing countries where phones generally have lower prices than in developed markets.

Microsoft launched the latest version of its Windows Phone operating system, Windows Phone 8, in late 2012 to critical praise. The operating system was slow to catch on with consumers though, perhaps due to the absence of several popular apps on the platform, but has been slowly increasing its market share.

Windows Phone had a 3 percent share of the smartphone market in the fourth quarter of 2013, up from 2.6 percent in the last three months of 2012, according to IDC. In contrast, Google’s Android dominated the smartphone market at the end of 2013 with a 78.1 percent share. Apple’s iOS was in second place at 17.6 percent.

IDC forecasts Windows Phone will continue to increase its market share to hit 7 percent in 2018.

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Samsung Makes Changes In Mobile

Samsung Electronics Co Ltd, the world’s biggest mobile phone manufacturer, has replaced the head of its mobile design team amid criticism of the latest Galaxy S smartphone.

Chang Dong-hoon offered to resign last week and will be replaced by Lee Min-hyouk, vice president for mobile design, a Samsung spokeswoman said on Thursday.

“The realignment will enable Chang to focus more on his role as head of the Design Strategy Team, the company’s corporate design center which is responsible for long-term design strategy across all of Samsung’s businesses, including Mobile Communications,” Samsung said in a statement.

Lee, 42, became Samsung’s youngest senior executive in 2010 for his role in designing the Galaxy series, a roaring success which unseated Apple Inc’s iPhone as king of the global smartphone market.

Samsung now sells two times more smartphones than Apple, largely thanks to the success of Galaxy range.

But the South Korean firm has also been battling patent litigation the world over, with Apple claiming Samsung copied the look and feel of the U.S. firm’s mobile products.

The Galaxy S5, which debuted globally last month, has received a lukewarm response from consumers due to its lack of eye-popping hardware innovations, while its plastic case design has been panned by some critics for looking cheap and made out of a conveyor belt. The Wall Street Journal said the gold-colored back cover on the S5 looked like a band-aid.

Chang, a former professor who studied at the School of the Art Institute of Chicago, will continue to lead Samsung’s design center which overseas its overall design strategy.

Lee, who acquired the moniker of “Midas” for his golden touch with the Galaxy series, started out designing cars for Samsung’s failed auto joint venture with Renault in the 1990s.

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Will Sprint Acquisition Efforts Succeed

Sprint Corp is meeting with banks to devise a funding plan for its bid for smaller rival T-Mobile US Inc, a source familiar with the situation said, as the mobile carrier works to ease regulatory concerns that the deal would hurt competition.

The source said that Sprint, which is owned by Japan’s SoftBank Corp, is looking to fund the bulk of T-Mobile’s estimated $50 billion price tag with corporate bonds and cover the rest with syndicated loans and convertible bonds.

Sprint is currently having discussions with at least five banks, the source told Reuters, including JP Morgan, Goldman Sachs and Deutsche Bank.

Bloomberg, which first reported that Sprint was in talks with banks on Thursday morning in Asia, said the carrier was also talking to Mizuho Financial Group Ltd and Citibank. Softbank is expected to make a formal offer in June or July, Bloomberg added.

Sprint spokeswoman Roni Singleton told Reuters the company does not comment on rumors and speculation. T-Mobile and SoftBank both declined to comment on the Bloomberg report.

Sprint is facing a battle ahead with U.S. regulators who oppose consolidation in the wireless market on the basis it would inhibit competition. The company is aware it may have to give up some of its spectrum holdings to win over critics, the source said.

Two of the most vocal opponents to the deal are Federal Communications Commission Chairman Tom Wheeler and U.S. antitrust chief William Baer, who have pointed to T-Mobile’s success since U.S. authorities rejected a 2011 merger between AT&T Inc and T-Mobile on the grounds the market needs at least four major players to be competitive.

The failure of that deal cost AT&T a $6 billion break-up fee, a penalty Sprint feels confident it can avoid, the source said, adding that it is leaning towards having Deutsche Telekom, which currently owns 67 percent of T-Mobile, retain part of that stake.

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