London Market Gains From Digital Security Focus

Insurers in the London Market are increasing their emphasis on securing computer systems, resulting in significantly fewer problems, according to an industry survey.

The survey by London-based International Underwriting Association (IUA) found that the number of firms that have experienced an unexpected outage of critical business systems over the past 12 months has dropped significantly, from 73 percent in 2005 to 53 percent this year.

Companies also reported knowledge of fewer outages for their major competitors and key suppliers–from 29 percent to 7 percent and from 29 percent to 12 percent, respectively.

“I believe more and more insurers are beginning to practice what they preach to their clients: the importance of clear and comprehensive information security procedures that are given seriously throughout an organization, right up to board level,” Paul Skinner, chairman of the IUA's Digital Risk Working Party and senior ICT underwriting specialist at Chubb Insurance Company of Europe, said in a statement.

“The companies that are implementing such measures are seeing clear benefits with fewer interruptions to the critical systems upon which business relies so heavily,” he noted.

The study also found that more firms are using a centralized global information security policy, with 75 percent doing so compared with 68 percent in 2005. The number of companies reporting they had no formalized central policy, instead relying on individual offices to establish their own security, decreased from 10.5 percent in 2005 to 6.2 percent this year.

The IUA surveyed a total of 36 insurance companies–typically their information technology executive or chief information officer–in March and April 2006, repeating a similar survey conducted during the first quarter of 2005.

The study is important, Mr. Skinner said, because it sheds light on an area that would otherwise not be mentioned by most companies in the market.

“Often information security breaches are not publicized and it can be quite difficult to gauge industry trends,” he said. “The results of the IUA's survey, however, do appear to show an encouraging development.”