Insurers Grapple with Economic Costs of Cyber Attacks

Lloyd’s of London partnered with risk-modeling firm Cyence to publish a report examining the potential economic losses which would be incurred from a major hack of a cloud service provider or a cyber-attack on computer operating systems which are used by business across the planet.

The report estimated that a major, global cyber-attack could result in an average of $53 billion in economic damage. That figure is on par with the cost of mega-disasters of the recent past, like Superstorm Sandy of 2012 and other unprecedented natural disasters.

“Because cyber is virtual, it is such a difficult task to understand how it will accumulate in a big event,” Lloyd’s of London chief executive Inga Beale stated.

The economic costs of an attack on a cloud provider could make the $8 billion in damages of the “WannaCry” ransom attack look like peanuts. That attack, which occurred this past May, spread to 100 countries.

The economic costs typically include interruptions in business plus the cost of fixing computers damaged in the attacks.

The report from Lloyds comes on the heels of a US government warning to industrial companies to be aware of a hacking campaign which could target the nuclear and other energy sectors.

In June a virus labeled “NotPetya” spread from infected computers in Ukraine to businesses all over the world. It worked by encrypting data on infected computers, thus causing them to be unusable. The attack interfered with activity at ports, factories and law firms. “NotPetya cost the world $850 million in economic losses.

Small Business “Pays it Forward”. All of It.

Business is all about pleasing customers and making money, and small-town cookie shop RoRo’s Cookies is doing just that. This business, owned by Mom Rose Gebran, comes with a special twist though: all proceeds go to charity.

7KTBV reports:

American Express Cuts Costs for Small Businesses

American Express has moved to expand its reach by reducing small business fees by as much as 1%. The company hopes the change will double the number of small businesses that accept the card over the next two years.

Until now, Amex payments have been known to be a more costly service than those of other cards, resulting in many shops and other small retailers placing higher credit card surcharges on the customers, or simply not accepting Amex cards at all. The Reserve Bank states that the average merchant pays Amex service fees of 1.58% for each transaction. MasterCard, Visa and Diner’s Club all have fees that range from 0.78-0.8%. Small businesses can be greatly affected by this discrepancy, especially because larger stores are charged less for accepting American Express cards.

“We want to make it a lot easier for merchants to accept American Express,” said Katrina Konstas, head of the small merchant’s business at Amex. “For some businesses, it will be a reduction of whole percentage point.”

As part of their recent efforts, Amex has signed a deal with the Commonwealth Bank that, to a certain extent, will enable small businesses to process Amex payments at the same cost as other credit cards.

Claire Roberts of CBA explained: “Consumers want flexibility in the way they pay for goods and services and by adding American Express we are now providing small businesses with card payment options at the same rate.”

Turkish and Emirates Air Exempt from US Laptop Exclusion

Passengers traveling on two major middle eastern airlines, Turkish Airways and Emirates Airlines, will be allowed to bring laptops into cabins during their flights to the United States, according to David Lapan, a spokesman for Homeland Security in Washington, DC.

A third airline is also exempt from the new US restrictions, Abu Dhabi’s-Etihad Airlines.

The reasons for the lenient approach to these carriers is still unclear, leaving some wondering what these companies do differently to ensure that terrorists do not smuggle explosives on to airplanes through electronic devices. In Turkey, the use of CT scanners to examine electronics just before boarding has recently been instituted, helping heighten the level of security on flights to the USA.

Both airlines informed the US Department of Homeland Security that, “they are ready to comply with the enhanced security measures.”

“Protecting the American people and raising the global baseline on aviation security remains the top priority,” Lapan said. “We will continue to closely observe operations in these airports to ensure these enhanced measures are implemented effectively and to the required levels.”

Dubai International Airport is now the world’s busiest for international traffic, mostly due to the great expansion of Emirates Airlines, whose hub is in Dubai.

Emirates said in a statement that it has been able to “implement heightened security measures and protocols” to the standard that meets the requirements of the United States. What those measures are, exactly, was not discussed, but it followed a similar permission granted to Etihad earlier in the week.

“We would like to express our gratitude to the U.S. and local authorities for their support and thank our customers for their understanding and patience during the last few months when the ban was in place,” Emirates said.

Turkish Airlines sent Twitter messages to their passengers heading to the US that they should, “fasten your seatbelts and enjoy your own electronic devices.”

The airline said that over the past 102 days the ban on laptops in cabins originating in the Middle East to the US they had taken away more than 81,000 electronic devices, storing them in special protected baggage.

The ban on laptops in airplane cabins on flights to the US still applies to seven international airports in the Middle East: Amman, Jordan; Kuwait City; Cairo; Jeddah and Riyadh, Saudi Arabia; Casablanca, Morocco; and Doha, Qatar.

South Korean President Moon Jae-in to Meet President Trump

The lead up to the coming meeting between President Moon Jae-in of South Korea and President Donald Trump is full of anticipation over the many things the two leaders are preparing to discuss.

One of those issues concerns South Koreans desire to import more American shale gas and also build new factories in the United States.

The summit is scheduled for next week in Washington, DC. South Korea’s largest business group, the Korea Chamber of Commerce, are preparing a large gamut of new investment opportunities which can potentially be a source of job growth for the US. Offering jobs to US citizens should give the Koreans a better position vis a vis the enlarging trade imbalance in favor of Korea which is of special concern to the isolationist tendencies of President Trump.

Samsung Electronics announced earlier this week that it plans to build a new appliance factory in South Carolina for about $380 million. In addition, the giant consumer electronics company would like to beef up its semiconductor plant in Texas for about $1.5 billion. Additional states in the US can also expect some job growth if LG Electronics implements its plan to invest $250 million into constructing a new factory to make washing machines in Tennessee, and $300 million on a new building in New Jersey.

Since 2012 the trade deficit the US has with South Korea has almost doubled. At that time, the US and South Korea signed a bilateral trade agreement. Trump criticized this very deal while on the campaign trail last year.

Total trade between the two allies totaled $144.6 billion in 2016, with the US holding a $17 billion deficit.

Nestle Considering Sale of Its US Chocolate Arm

Picture credit: Steven Depolo.
Pile of Crunch, Butter Finger, Snickers, and Baby Ruth Candy Bars.

The new head of Nestle SA, Mark Schneider, is considering selling its US chocolate division due to sluggish sales and a move toward faster-growing businesses like health care and coffee.
Schneider became the CEO of the Swiss-based corporation in 2016 after working for many years in pharmaceuticals and medical products.

The US division is had revenue of about $923 million last year. Recently the food industry has come under increasing pressure to reduce costs. After Kraft Heinz made an unsuccessful bid to purchase Unilever at the beginning of 2017, even the largest companies are fearful that they could become targets of buyouts from rival companies. This is even more of a worry for candy companies as sales in the US of chocolate slow due to the American disavowal of sugar as a source of nutrition. Last year Hershey Co repelled a takeover bid by Mondelez International Inc, and just six months later, last March, Hershey announced its intention to reduce its workforce by 15%.

“This might seem small stuff, but in our view, it could be a significant step by new(ish) CEO Mark Schneider,” James Edwardes Jones, an analyst at RBC Capital Markets, said in a note. “The possible disposal of the U.S. business is not everything we had hoped for, but might be the start of something bigger.”

Canine Flu on the Rise

Photo courtesy of Yoel Ben-Avraham.

Certain parts of the US are seeing a significant uptick in the number of pet dogs coming down with the flu. Although it is not contagious to people, or life-threatening to dogs, it is still a concern to pet owners in Arkansas, Florida and North and South Carolina, where the epidemic is at its worst.

According to the American Veterinary Medical Association as much as 80% of dogs that are exposed to canine flu catch it themselves, making it hard to control once it is in the environment. Of course, the worst places are where dogs are kept close together, such as in shelters or boarding facilities.

Symptoms of dog flu are like that of human flu: sneezing, runny nose, and frequent coughing are probable signs your doggie is infected. Owners can expect their pets to recover within a few days to a week. Very rarely the illness turns life-threatening, and that is usually only in the severest cases or when another infection develops later.

The University of Florida College of Veterinary Medicine advises owners to call the vet before taking your dog in for treatment if he exhibits any of the above symptoms. Your dog is still contagious, and bringing him unnecessarily to the vet’s office could expose otherwise healthy dogs to the flu. The American Veterinary Medical Association suggests keeping your dog away from other dogs for at least three weeks until there is no chance of passing on the virus.

Poll Shows Most Voters Want to Stay in Paris Climate Accord

A survey conducted between June 2 and 4 showed that almost 60% of Americans are against President Donald Trump’s decision to pull the US out of the Paris Climate Agreement. The poll was done by the Washington Post and ABC News.

The results were that 57% of registered voters asked said they oppose the decision, while 33% were in favor.
President Trump announced his intention to withdraw on June 1.

Opinions about the decision were highly correlated with the party voters were identified with. Among Democrats, 82% were opposed to withdrawal and 8% in favor. Among those identifying as Republican who took the survey, 67% agreed with Trump’s decision and 25% were opposed. Sixty-three percent of those identifying as independent were against an exit from the agreement and 22% were in support.

The subjects were also asked if they thought withdrawal from the accord would harm or help the US role as leader in the world. The poll showed that 56% of registered voters thought withdrawal was harmful to the US, while 22% thought it would help.

People were also questioned about their opinions on whether withdrawal from the accords would help or hinder the US economy. The results showed that 37% of registered voters answering the survey felt withdrawal would help the economy, while 42% said they thought withdrawal would harm the economy.

Despite the President’s decision to withdraw the US from the landmark agreement, many companies, government bodies and academic leaders and institutions plan to continue to follow the goals of the Paris Climate Agreement.

Silverfern Releases Overview of 2016 Investments

The Silverfern Group recently held its annual 2017 meeting in NYC. The firm provided an overview of its investments and growth in 2016. Specializing in investment management in areas including middle market private equity, real estate and private debt, Silverfern is run by co-Managing Partners Clive Holmes and Reeta Holmes. At the event, they announced that the firm made five new investments in private equity and real estate: Tempo RiverPark Apartments, APR Energy, Continental Bakeries, Broad River Power Holdings and Waste Services Group. They also made three follow-on investments into APR Energy, O-Tex Holdings, Inc. and Sequitur Energy Resources. Silverfern made three investment exits as well.

Clive Holmes said: “Silverfern’s two largest, global networks- our base of investors spanning five continents and 23 countries, and our network of more than 50 operating executives and local operating partners- again provided us with a flow of private, off-market information that created unique investment opportunities. We continue to add global diversification to our portfolio, while at all times remaining an informed, local investor.”

Co-Managing Partner Reeta Holmes added: “2016 proved to be extremely productive for Silverfern as we made five new platform investments, three follow-on investments, and achieved three investment exits globally. The pace of our investments in middle market private equity, real estate and private debt globally has been accelerating, and we expect it will continue in 2017.”

 

Mark Fields Receiving $51.1 Million to Step Down

After three years as CEO at the Ford Motor Company, Mark Fields, age 56, will be leaving the company with a compensation package valued a $51.1 million. The pay-off will be in a combination of cash, stock awards, and pensions.

During his tenure as CEO Fields made historic profits for the company. Now, however, the stock price has eroded by 40 percent due to slipping confidence by investors in the future of the company.

Fields’ compensation package was calculated by the executive compensation tracking firm Equilar for the benefit of the Associated Press.

He will be eligible for $22.1 million in stock awards, will receive about $17.5 million in pension benefits, and could earn an additional $3.6 million bonus, as long as he is not hired by one of Ford’s competitors.

The former CEO also has $7.9 million in vested stock options. However, other stock options have no value at the moment since the company’s stock price crashed.