From the January 3, 2011 issue of National Underwriter Property & Casualty • Subscribe!

Cyber Attacks A Board-Level Concern, Lloyd's, HP Report

Many companies are unknowingly vulnerable to data leakage, phishing attacks, trojans or advance persistent threats, according to a new report from Lloyd's and technology company HP.

Digital risk management must be a board-level concern for business as the range, frequency and scale of cyber attacks increases, said the report, "Managing digital risks: trends, issues and implications for business."

The report warns that as businesses become more reliant on technology, they will face more complex and damaging digital attacks as sophisticated attackers quickly adapt their methods to steal from, disrupt and spy on businesses.

Lloyd's Chairman Lord Peter Levene said in a statement: "A discussion of digital risks should be on the agenda of board meetings everywhere as cyber attacks become more frequent, more creative and more disruptive. Cybercrime is an international business aided by those countries without the legislative framework to tackle it."

While most of the digital risks that companies face, such as extortion and stolen information, are similar to risks they have always known, technology has increased the speed at which these risks can occur and amplified their impact, the report said.

Lord Levene said in a forward to the report that "attacks on companies in one country can emanate from the other side of the world, while some countries are effectively 'cyber sanctuaries,' where criminals can operate free from cybercrime legislation."

The study points out that as part of the overall digital risk management strategy, companies should consider the growing number of cyber-risk insurance products and solutions that can transfer these risks to third parties. Although difficult to measure, the current market for cyber insurance is estimated to be about $600 million, a 16-25 percent increase from 2009.

Most digital risk mitigation typically happens within the IT department. However, risk managers, technology experts and other stakeholders need to be more involved in the process in order to bring broader business perspectives to the decisions that are made.

Prith Banerjee, senior vice president of research at HP and director of HP Labs, said the real challenge for risk managers "is to determine how to effectively monitor digital risks in order to decide how seriously they should be considered."

Specifically, for risk managers, the report recommends:

o Setting up a working group of technology experts and key stakeholders across the business to monitor and review business risk exposure.

o Becoming more involved in IT governance and strategy.

o Ensuring applicable standards are used to manage digital risks.

o Considering risk transfer solutions as part of an overall digital risk management strategy.

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Unit used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Tech Digest eNewsletter

Technology related insights for insurance professionals including key developments, solution providers and news briefs from the carrier front – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.