Erie Indemnity outage continues for 10th day as Google warns insurance industry of 'Scattered Spider'

By Isha Marathe

June 16 - (The Insurer) - Erie Indemnity Company, which manages Erie Insurance, is tackling a system outage that has gone on for at least 10 consecutive days, as Google warns the insurance industry about ransomware activity.

Erie identified unusual network activity that it determined to be the result of an information security event after facing system outages and disruptions, the company said in a June 7 8-K filing with the SEC.

"We are making strong and steady progress. Our teams — working alongside leading cybersecurity experts — continue working around the clock to restore access for customers, agents and employees. We’re confident in our actions, but this work is complex and takes time. We appreciate your patience and understanding," Erie said in a statement on Saturday.

On Monday, chief analyst within the group at Alphabet's Google, John Hultquist, told Reuters in an email that a particularly disruptive set of hackers operating under the nickname 'Scattered Spider' have recently turned their attention to the insurance industry, according to the company's cybersecurity researchers.

"While we aren't able to share much more at this time, we can confirm that there is more than one US-based insurance victim," Hultquist said.

Scattered Spider is a term used by cybersecurity industry experts to track activities linked to a set of hacking tactics, techniques and procedures, particularly sophisticated social engineering.

"We are now seeing incidents in the insurance industry... Given this actor's history of focusing on a sector at a time, the insurance industry should be on high alert."

Erie's outage came days before the Cyber Risk Insurer reported that Philadelphia Insurance Companies (PHLY) ordered employees not to access the insurer’s network as it tackled a system outage.

On Monday, PHLY said it is working to get staff back online after the week-long outage, adding in an update that a forensic investigation is underway and law enforcement has been contacted after it discovered unauthorized network access last week.

In a notice posted last week on its website, Erie said it had activated its incident response protocols, and that the company is working with law enforcement and is conducting a forensic analysis with the assistance of cybersecurity experts "to gain a full understanding of this event."

Erie and PHLY did not confirm whether their system outages were the result of a cyberattack by Scattered Spider.