Posts Tagged ‘Week in Review’



December 7th, 2018

Week’s Top Stories: December 1 - 7, 2018

Posted at 10:00 AM ET

Wildfire Activity - California - Update: Recent wildfire activity has rendered especially severe impacts to areas of California, including areas of Butte, Los Angeles and Ventura Counties. Rates of extreme fire spread were enabled by especially dry, windy conditions on November 8 and the days following. Aggressive firefighting efforts allowed containment efforts to progress despite adverse conditions over the following week.

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Mw 7.0 Earthquake – Near Anchorage, Alaska: A magnitude (Mw) 7.0 earthquake was reported near Anchorage, Alaska around 17:29 UTC on November 30 (8:29 local time), according to the U.S. Geological Survey (USGS). The epicenter was located at a depth of 44.1 km and about 12.9 km (8.0 miles) north of Anchorage, Alaska. A tsunami warning was issued but later lifted by the U.S. National Weather Service.

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Asia Pacific Reinsurance Market: Abundant Capacity and Flat Pricing: For buyers of catastrophe reinsurance in the Asia Pacific region, pricing has remained largely flat during 2018. The region has experienced losses during the year to date, and at the time of writing, it is expected that a proportion of these will impact reinsurers. At the same time, market capacity remains abundant and underlying reinsurance market conditions are favorable for buyers, as reported by Guy Carpenter in its 2018 Asia Pacific Catastrophe Reinsurance Executive Summary. The effect of the 2018 losses on market sentiment going forward is not fully understood.

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A Math Formula May Offer a Solution to Insurers’ Critical Challenges: Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

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Ensuring innovation is more than a cliché: The numerous challenges the insurance industry faces mean that innovation is critical to tackling them. Rob Bentley, Chief Executive Officer of Guy Carpenter’s Global Strategic Advisory, describes how Guy Carpenter is helping its clients manage these challenges-especially the conundrum of InsurTech, in an interview that appeared in Intelligent Insurer magazine.

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Cyberattacks Top the List of Risks in North America: For business executives in the United States and Canada, cyberattacks are now the number one risk to doing business, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

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November 30th, 2018

Week’s Top Stories: November 24 - 30, 2018

Posted at 10:00 AM ET

Cyberattacks Top the List of Risks in North America: For business executives in the United States and Canada, cyberattacks are now the number one risk to doing business, according to the recent World Economic Forum (WEF) report Regional Risks for Doing Business 2018.

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Terrorism: The Need for Expanded Capacity: Terrorists are increasingly able to modify, adapt and reinvent their tactics and quickly spread their methodologies to their worldwide support base. Economically, the effect of this change across the globe has been significant. Tourism, trade and investments are examples of areas affected as countries grapple with terrorist actions, both direct and indirect. According to the Institute for Economics and Peace, although the peak of global economic impact from terror events was reached in 2014, it remains at historically high levels.

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Affirmative versus Silent Cyber: An Overview: While the current debate over “affirmative” versus  “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of ”silent cyber” more critical. These two 2017 cyberattacks effectively shifted the conversation from data breach, notification costs and third-party liability to first-party liability insuring agreements due to the extent and expanse of the systematic, large-scale damages they triggered.

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Terrorism: Reinsurance Role in Mitigating the Expanding Peril: More than ever before, brokers and underwriters must use their expertise and solutions to keep insurers and citizens adequately protected. With the peril mutating rapidly, the entire insurance value chain is being challenged – by new types of threats, new modes of attack and the terrorists’ deployment of any violent and disruptive means to reach their desired end-state. The (re)insurance industry must remain in tune with these developments; it must gain insights from academia and observers on how the peril is changing, keep alert to new products in the market, unlock new sources of capacity and help clients understand their portfolios more readily so they remain relevant to their consumer base.

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A Math Formula May Offer a Solution to Insurers’ Critical Challenges: Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

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Risks from Infrastructure Shortfalls in Asia Pacific: In the Asia Pacific region, it is important to address the risk of critical infrastructure failure or shortfall, as analyzed by the latest annual report by Marsh & McLennan Companies’ Asia-Pacific Risk Center titled “From Threats to Impact - Evolving Risk Concerns in Asia-Pacific.”

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November 23rd, 2018

Week’s Top Stories: November 17 - 23, 2018

Posted at 10:00 AM ET

Affirmative versus Silent Cyber: An Overview: While the current debate over “affirmative” versus  “non-affirmative” coverage has been ongoing for a few years, WannaCry and Petya/NotPetya cyberattacks helped make the issue of “silent cyber” more critical. These two 2017 cyberattacks effectively shifted the conversation from data breach, notification costs and third-party liability to first-party liability insuring agreements due to the extent and expanse of the systematic, large-scale damages they triggered.

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Regional Risks for Doing Business: The recent World Economic Forum’s 2018 Executive Opinion Survey provides a snapshot of the global risks that executives say are of highest concern for doing business in their respective countries. High unemployment remains the top risk concern for business leaders worldwide for the third year in a row, while concerns over large cyberattacks and national governance failure continue to rise.

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A Math Formula May Offer a Solution to Insurers’ Critical Challenges: Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

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GC Videocast - Emerging Cyber Risks Explained: The “years of data breaches,” 2013 and 2014, evolved to healthcare breaches, followed by ransomware attacks. What cyber perils lie ahead?  Guy Carpenter’s Jeremy S. Platt, Managing Director and Cyber Solutions Specialty Practice Leader; and Chris Shafer, Assistant Vice President at Cyber Solutions Specialty Practice, explain in the video.

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2018 Asia Pacific Catastrophe Reinsurance Report: Guy Carpenter has released its 2018 Asia Pacific Catastrophe Reinsurance Report. The report reviews property catastrophe cover trends; market conditions, including losses and pricing; and catastrophe events in each of the major Asia Pacific countries during 2018. The Executive Summary of the report highlights key findings, including discussion of the various catastrophe events that have impacted the Asia Pacific region during 2018, such as Typhoon Jebi, the strongest typhoon to hit Japan in 25 years; and the Kerala Floods, the most severe to hit the southwestern Indian state since 1924.

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Silent Cyber Explained: “Silent cyber,” also known as unintended or non-affirmative coverage, refers to the unknown or unquantified exposures stemming from cyber perils that may be triggered within traditional property and liability insurance policies. The systemic nature of the cyber risk means silent cyber may become increasingly more prevalent in virtually every type of insurance policy.

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November 16th, 2018

Week’s Top Stories: November 10 - November 16, 2018

Posted at 10:00 AM ET

A Math Formula May Offer a Solution to Insurers’ Critical Challenges: Guy Carpenter has developed a methodology that applies a mathematical formula to provide insurers and reinsurers with a unified, practical framework for risk pricing and capital allocation.

Read the article >>

Silent Cyber Explained: “Silent cyber,” also known as unintended or non-affirmative coverage, refers to the unknown or unquantified exposures stemming from cyber perils that may be triggered within traditional property and liability insurance policies. The systemic nature of the cyber risk means silent cyber may become increasingly more prevalent in virtually every type of insurance policy.

Read the article >>


Increasing Frequency of Extreme Weather Events in Asia Pacific: The Asia Pacific may be the most adversely impacted region by the pronounced increase in the frequency of extreme weather events around the world. The Guy Carpenter Asia-Pacific Catastrophe Report 2017 projects an increase in economic losses from natural disasters in Asia, which amounted to USD 126 million a day between 2006 to 2015.

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GC Videocast - Emerging Cyber Risks Explained: The “years of data breaches,” 2013 and 2014, evolved to healthcare breaches, followed by ransomware attacks. What cyber perils lie ahead?  Guy Carpenter’s Jeremy S. Platt, Managing Director and Cyber Solutions Specialty Practice Leader; and Chris Shafer, Assistant Vice President at Cyber Solutions Specialty Practice, explain in the video.

Read the article >>

Wildfire Activity – California: Significant wildfires have affected areas of northern and southern California due to extremely dry, windy conditions and very dry fuels. In Northern California, the Camp Fire has burned at least 130,000 acres since November 8 and claimed at least 48 lives, making this the deadliest wildfire in known California history. Damage survey efforts are still ongoing, however initial reports indicate at least 7,600 residences destroyed with another 225 damaged. Meanwhile in Southern California, the Woolsey Fire has consumed at least 97,620 acres along with 483 structures, and at least two lives. Ongoing dry, windy conditions have offset containment efforts.

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Safeguarding Development in Asia-Pacific – Upgrading Infrastructure to Match Demand: In many parts of Asia-Pacific, infrastructure development does not meet the region’s rapid economic growth and urbanization, according to the latest report by Marsh & McLennan Companies’ Asia-Pacific Risk Center. The study, titled “From Threats to Impact - Evolving Risk Concerns in Asia-Pacific,” notes a finding by Asian Development Bank (ADB) that developing countries in Asia-Pacific and central Asia will require an additional USD 22 trillion for infrastructure development to maintain economic growth and eradicate poverty between 2015 and 2030.

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November 9th, 2018

Week’s Top Stories: November 3 - November 9, 2018

Posted at 10:00 AM ET

Silent Cyber Explained: “Silent cyber,” also known as unintended or non-affirmative coverage, refers to the unknown or unquantified exposures stemming from cyber perils that may be triggered within traditional property and liability insurance policies. The systemic nature of the cyber risk means silent cyber may become increasingly more prevalent in virtually every type of insurance policy.

Read the article >>

Evolving Terror Threats - Innovation Needed to Meet Changing Demands: New modes of attack are causing a shift from large terrorist events aimed at property destruction to less sophisticated attacks causing mass casualties and fear. With global commerce, tourism and financial markets impacted, demand is growing for modeling, capacity and protection-gap solutions to increase resiliency against such attacks.

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Facultative or Treaty and Why the Need for Hybrid Solutions: Insurers face challenges in managing underwriting, capital protection, risk and risk profiling as they navigate underwriting guidelines based on their gross and net risk underwriting appetite. Against these challenges, companies utilize various forms of reinsurance, traditionally facultative or treaty, to buy risk protection, shore up capital and satisfy rating agencies, according to Jeff Fleming, Managing Director, Guy Carpenter.

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Solutions for Improving Profitability in the Commercial Auto Liability Line: One of the major factors affecting property/casualty industry profitability in the United States in recent years has been the poor performance of the commercial auto liability (CAL) line. On both a Calendar and Accident Year basis, industry CAL underwriting results have been deteriorating for the past decade. Accident Year combined ratios have been above 105 percent since 2010, and carriers are feeling the pressure to reverse this trend. Related lines of business such as umbrella, have also felt the adverse effects of challenging loss trends driven by CAL. It is an open question regarding which will arrive first: autonomous cars and trucks or underwriting profits for CAL writers, believes Nick Durant, Managing Director, Guy Carpenter.

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Baden-Baden Reinsurance Symposium Explores Market Impact of Global (Re)insurance Composites: Guy Carpenter hosted the Reinsurance Symposium in Baden-Baden on October 21, the 10th year that Guy Carpenter has hosted the event. The theme of the Symposium was “Back to the past: a return to global composites.”

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Recent Thought Leadership from Guy Carpenter – North America Focus: Here we present a recap of recent thought leadership from Guy Carpenter focusing on important insurance and reinsurance topics in North America.

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November 2nd, 2018

Week’s Top Stories: October 27 - November 2, 2018

Posted at 10:00 AM ET

Escalating Threat of Cyber Terrorism: The WannaCry and NotPetya cyber-attacks illustrated the magnitude of the damage that cyber-attacks can cause. These two attacks affected organizations in more than 150 countries, prompted business interruption and other losses estimated at well over USD 300 million by some companies, brought reputational damage and resulted in loss of customer data.

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Facultative or Treaty and Why the Need for Hybrid Solutions - GC@PCI Commentary: Insurers face challenges in managing underwriting, capital protection, risk and risk profiling as they navigate underwriting guidelines based on their gross and net risk underwriting appetite. Against these challenges, companies utilize various forms of reinsurance, traditionally facultative or treaty, to buy risk protection, shore up capital and satisfy rating agencies, according to Jeff Fleming, Managing Director, Guy Carpenter.

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Life: Emerging Competition and the Need to Remake the Reinsurance Relationship - GC@PCI Commentary: The life reinsurance sector has been shrinking for several years, but reinsurers possess the capabilities to remain relevant and vital if they take a strategic approach. They may then be able to better meet their cedents’ principal needs and solidify or increase their value to life insurers, according to David Rains, Managing Director, Guy Carpenter.

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Mortgage Credit Risk Transfer Market – Expanding Growth Opportunities - GC@PCI Commentary: Fannie Mae and Freddie Mac – government-sponsored entities (GSEs) in the United States – purchase hundreds of thousands of mortgage loans and assume the risk of mortgage credit default, interest rate volatility and prepayment. The GSEs began transferring mortgage credit default risk only in the last few years. The organizations are now programmatically using (re) insurance to transfer that credit risk and plan to continue to do so. (Re)insurers seeking growth may look to this market as a diversifying risk with several different options available –market changes and safeguards in place make it even more viable, according to John Tedeschi, Executive Vice President, Guy Carpenter.

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The Transformation of Australian and New Zealand life insurance - GC@SIRC Commentary: The life insurance industry in Australia is facing unprecedented challenges from forces within and from the effects of an increasingly globalized economy. As life industry profitability has declined in Australia in recent years, the underlying manufacturing business model is rapidly changing, according to Matthew Rose, Managing Director, Guy Carpenter.

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Solutions for Improving Profitability in the Commercial Auto Liability Line - GC@PCI Commentary: One of the major factors affecting property/casualty industry profitability in the United States in recent years has been the poor performance of the commercial auto liability (CAL) line. On both a Calendar and Accident Year basis, industry CAL underwriting results have been deteriorating for the past decade. Accident Year combined ratios have been above 105 percent since 2010, and carriers are feeling the pressure to reverse this trend. Related lines of business such as umbrella, have also felt the adverse effects of challenging loss trends driven by CAL. It is an open question regarding which will arrive first: autonomous cars and trucks or underwriting profits for CAL writers, believes Nick Durant, Managing Director, Guy Carpenter.

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October 26th, 2018

Week’s Top Stories: October 20 - 26, 2018

Posted at 10:00 AM ET

Baden-Baden Reinsurance Symposium Explores Market Impact of Global (Re)insurance Composites: Guy Carpenter hosted the Reinsurance Symposium in Baden-Baden on October 21, the 10th year that Guy Carpenter has hosted the event. The theme of the Symposium was “Back to the past: a return to global composites.”

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Leading Cyber Insurance Strategies: Insurers are undertaking several initiatives to seize opportunities in writing network security and privacy insurance in order to achieve profitable growth. These are some of the actions on which they are focusing:

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Pushing the Model Boundaries - GC@BB Commentary: As Solvency II-based capital regimes further impact internal capital models, greater clarity around a company’s view of risk is becoming more critical. Yet optimizing model infrastructures is often limited by platform inflexibility, computational power and cumbersome approval processes, according to a European roundtable of Guy Carpenter leaders.

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A Strategy for Market Volatility: Portfolio Optimization - GC@BB Commentary: Today, (re)insurers are challenged by a host of factors pressuring companies’ earnings and capital – excess capacity is impacting underwriting profitability as claim frequency and severity are rising – contributing to a movement toward balance sheet volatility that impacts earnings and growth, according to a global roundtable of Guy Carpenter leaders.

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Closing the Gap: Public Sector Risk Financing Solutions Increase Community Resiliency - GC@BB Commentary: Recently a variety of stakeholders have expressed the need for more resilient communities that can stand stronger against volatility and shocks to their environments – shocks that are often caused by catastrophic events and the interaction of economic development with inadequate risk management. Concurrently, there are industry concerns around the protection gap (gap between insured and uninsured losses) and the steps necessary to help people recover when their lives are up-ended by unforeseen events, believes Jonathan Clark, Head of Public Sector Specialty, U.S., Guy Carpenter.

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MGAs – Value at What Cost? - GC@BB Commentary: The MGA sector has experienced a period of meteoric growth. Yet while it remains buoyant, multiple pressures could stymie further growth unless MGAs can better demonstrate value to capacity providers, believes Vicky Carter, Vice Chairman – Global Strategic Advisory, Guy Carpenter. “The MGA is an increasingly important part of the insurance distribution chain across a number of lines of business,” explains Carter, “providing a well-established route to market, with experienced, specialist underwriters offering access to many niche sectors or opening new geographies for numerous carriers.”

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October 19th, 2018

Week’s Top Stories: October 13 - 19, 2018

Posted at 10:00 AM ET

Hurricane Michael: Hurricane Michael made landfall on October 10 as a high-end Category-4 hurricane on the Florida Panhandle, with maximum sustained winds of 155 mph. The storm rendered severe to complete damage to areas from Panama City to Port Saint Joe, with especially severe damage in Mexico Beach due to severe wind and storm surge.

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Real-Time Risk Management and Next-Generation Insurance: A confluence of trends is enabling businesses and the insurance industry to move toward a revolutionary new approach: real-time risk management.

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Holding Healthcare to Ransom - Healthcare Industry’s Fight Against Cyberattacks: Healthcare is one of the industries most vulnerable to cyberattacks. The high stakes – human lives and sensitive data – make healthcare the perfect target for cybercrime.

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ILS Market Looks to Asia for Further Growth: The insurance linked securities (ILS) market is now over two decades old. Since the execution of the first catastrophe bond transaction in the late 1990s, the alternative risk transfer market has evolved and matured impressively. Guy Carpenter’s Shiv Kumar, President and Global Leader of GC Securities,* Capital Markets, provides some insight. (As printed in Asia Insurance Review)

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From Threats to Impact: Evolving Risk Concerns in Asia-Pacific: In recent years, there has been an increase across the globe in the scale, diversity and impact of risk events. From cyber-attacks to major hurricanes and floods, and from the US-China trade war to unexpected developments around relations with North Korea, recent norms have been turned upside down and uncertainty reigns.

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GC Capital Ideas Tip: New Email Alert: In line with the launch of Preference Center, GC Capital Ideas has also adopted a new email alert look-and-feel, which aims to optimize our readers’ and clients’ user experience with us.  The enhancements offered by Preference Center and the new email alerts are part of Guy Carpenter’s integrated strategy to empower readers with the informative and actionable insights that Guy Carpenter provides.

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October 12th, 2018

Week’s Top Stories: October 6 - 12, 2018

Posted at 10:00 AM ET

A New Boldness in Tackling Emerging Risks: Risk teams are under increasing pressure to move beyond blocking and tackling to providing strategic risk advice that can help their companies achieve sustainable resilience in the face of critical emerging risks, according to the report Material Improbabilities, Getting Practical with Emerging Risks from Marsh & McLennan Companies Global Risk Center.

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Holding Healthcare to Ransom - Healthcare Industry’s Fight Against Cyberattacks: Healthcare is one of the industries most vulnerable to cyberattacks. The high stakes – human lives and sensitive data – make healthcare the perfect target for cybercrime.

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Super Typhoon Trami: In the West-Pacific Basin, Typhoon Trami made landfall in the city of Tanabe, Japan (Wakayama prefecture) on 30 September at around 11 UTC (8 PM local time), according to media reports. Before reaching Honshu, the typhoon had rendered considerable impacts while making close approach to Okinawa, Kyūshū and Shikoku Islands. Trami brought significant flood impacts as a result of heavy rainfall and storm surge, as well as variable property damage due to wind.

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Chart: Return on Premiums for Guy Carpenter Reinsurance Composite, Year-end 2017: Chart presents return on premiums for the Guy Carpenter Global Reinsurance Composite, 2005 through year-end 2017.

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Chart: Significant Insured Losses 2011–2Q2018: Chart exhibits the significant insured losses from 2011 through the second quarter of this year.

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Cybersecurity Awareness: On the start of the 15th National Cybersecurity Awareness Month in the United States, GC Capital Ideas has collected our recent articles that offer insights into this very critical risk. Cyber risk and security will remain a top priority for the foreseeable future. In addition to hackers and cyber criminals continuously developing new methods of attack, state-sponsored cyber-attacks have occurred according to the U.S. government.

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