Cyber Liability and Crime Update

Cyber Liability and Crime Update

Cyber Liability Probability of a Data Breach 2

3 Cyber Liability Challenges Carriers are not as forthcoming with sharing data as we would like to see Large uptick in ransomware incidents Non-discriminant when it comes to industry sector Typically delivered via malware to massive databases, hoping for anyone to click Seven-figure claims can involve not only the cost of the ransom payment, but also (more significantly) the IT forensics, legal and business interruption expenses associated with making those problems go away W2 scams as we enter tax season Exposure from third party vendors

4 Gallagher Bassett CRIME STATISTICS In the Last 5 Years: 25 Diocese 200 Diocesan Claims 1,150 Total Claims $7.3M Diocesan Payments $16.8M Total Payments 4

5 Gallagher Bassett CRIME STATISTICS 7 Claims paid $250,000 + In the Last 5 Years: Diocesan Experience Only 2 Claims paid $1,000,000 + 3 Claims reserved $250,000 + 1 Claim reserved $1,000,000 + 5

6 Gallagher Bassett CRIME STATISTICS: CALENDAR YEAR ANALYSIS 2013 $9,500 Total Incurred average per claim $9,500 Total Paid average per claim 2014 2015 2016 2017 $14,000 $14,000 $28,000 $20,500 $17,000 $12,000 $58,000 driven by large reserve $18,000 6

7 Seek assistance on claims & know how to properly present the claim Audit compliance Identify & understand risks for financial loss Understand coverage in place and how it will respond Implement proven risk management best practices 7

8 GB does not track the status of the perpetrator so it s not feasible to provide statistics (Bookkeeper, Pastor, Volunteer, etc.). Navigating Crime Losses Long-term/trusted employees have been involved in some of the more recent and larger losses. Is the uptick in crime losses simply a function of better risk management and auditing practices? Are there any practices or procedures the group would like to share? What s working and where should we focus our efforts? Any claim examples the group would like to share? What was learned as to coverage provided and how the claim was quantified?

9 Drugs and Injured Workers Physician Dispensing and the effect on prescription spend AWP and how it is affected by physician dispensing What to watch for an what you can do Opioids and the injured worker How states are reacting Alternative treatments

10 AWP Trends AWP (Average Wholesale Price) distinguishes the cost of one medication from another Coventry AWP trends reveal an increase of AWP of 4.4% last year, which was lower than the previous year. There was a 10.9% increase in brand drugs, which drove the increase Oxycontin and Lyrica were large factors in the increases. Oxycontin: 8% increase Lyrica: 15.2% increase What could drive an increase? Patent expiration Drugmaker consolidation Drug shortages What to watch for Unique strengths of medication provided to IW as they leave the doctor office. Refusal/excuses not to stick to a formulary Buddy Meds also dispensed Dispensation of Brand when Generic is available with no medical support Coventry Rx Rundown: https://chcautosolutions.coventryhealthcare.com/content/menu/home/news_insights/drug_trends/drug-trends-rx-rundown.html

11 Opioid Trends An estimated 2 million Americans abuse or are dependent on prescription opioids and the U.S. loses more than 115 lives each day to opioid overdose. Opioids continue to be the most expensive and highly utilized class of drugs for workrelated injuries, accounting for 24.1% of total pharmacy spend in 2017. On May 15, 6 additional states have field suit against Purdue Pharma, accusing the company of fueling a national opioid epidemic. This brings the lawsuits to 22, plus PR and NYC. Alternative treatments are not widely embraced by doctors, which some think may be due to aggressive marketing of opioids, but can also be linked to limited knowledge of alternative treatments. Be on the lookout for pricy and non-fda approved compounds and topicals.

Q & A 12

Thank You! 13