New York

Dealing with emerging risks like sea piracy, cyber crime and climate change will require vision, pragmatism and the collaboration of the public and private sectors, Lloyd's Chief Executive Richard Ward contends.

“For too many people across the world, these issues seem insurmountable,” he said during a conference here on “Managing Risk In The 21st Century: Climate Change, Cyber Risk and Piracy”–part of Lloyd's 360? Risk Insight series.

“The world seems strange and unfamiliar–a place where Navy SEALs are dispatched to hunt down Somali pirates, and where North American forests can be brought down by beetles thriving in shorter, warmer winters. A place where Bank of America ATMs can be disabled through a computer virus,” said Mr. Ward.

He said he believes these risks are manageable and “can be faced. And I believe that the businesses and governments that seize the challenge to get involved and find solutions will rise to the top.”

Three steps needed to combat these global risks are speed, tackling the complexity of the issues and building coalitions, according to Mr. Ward.

Speed, he advised, is a necessity because “we are playing catch-up” with piracy. Attacks have risen from 104 in the first quarter of 2009, to 136 in the second.

Cyber crime is also growing quickly, he said, noting that an attack now occurs every 10 seconds. Recalling that credit card records of 45 million TJ Maxx customers were hacked into, he said “this sort of hack is, I believe, considered pretty easy nowadays.”

Because of the complexity of the risks, Mr. Ward emphasized the need to build coalitions. “Lloyd's alone can't bring the rule of law to Somalia,” he said. “We can't cut global emissions. But these things are not beyond the limits of collective action.”

He noted the global aspect of emerging risks, pointing out that “the TJ Maxx ring of hackers were a highly globalized coalition including three Americans, three Ukrainians, two Chinese, an Estonian and a Belarusian.”

“If the bad guys can do it, so must we,” he said. “A big test is coming up at the Copenhagen climate change summit in December. Europe is excited by the prospect of U.S. engagement.”

The United States, he said, remains “the world's only superpower. You are critical to any solution and you are also vulnerable to the failure to find solutions.”

The event's keynote speaker, Admiral Luciano Zappata, deputy supreme allied commander for the North Atlantic Treaty Organization, said the nature of these evolving risks “will pose new demands for tools of prevention and response, making our military strength only one component of a much larger capability set that the alliance will need to use.”

He predicted that “we will increasingly need to work in partnerships and leverage relationships with other international organizations to improve the transparency of information and decision-making. A comprehensive, inter-agency approach, developed in concert with other international organizations like the European Union and United Nations, is fundamental to the security of a diverse alliance.”

The admiral said that as technology becomes less expensive and more widely available, “our adversaries will focus on vulnerabilities, attacking our populations, centers of commerce and our integrated global economy,” including social networks and the “vulnerable global commons.”

Ensuring access and use of such “global commons” is central to the “security and prosperity” of the world and to successful NATO operations, he said.

“The alliance is aware,” he noted, that it must focus not just on immediate threats, but also on longer-term risks and challenges such as cyber attacks, disruptions in the energy supply and “vital lines of communication, piracy, and the inevitable security implications of climate change.”

To respond to emerging risks and prepare for the security aspects of climate change, Adm. Zappata said the alliance is preparing for catastrophic climatic events such as storms, flooding and drought with an “elaborate and well-functioning system of civil emergency planning that spans more than 40 countries.”

He explained that longer-term climatic changes will:

o “Have humanitarian, economic, cultural and political implications that can result in ethnic and religious conflicts after large-scale migrations.

o “Result in tensions arising over access to vital resources, especially water, gas and oil.

o “Spur geopolitical and economic shifts when, for example, ice melting yields access to new trading routes and potential new resources.”

The military aspect, he added, is “only one tool in the toolbox.”

Special Reports /

Global Cooperation Needed To Combat Climate Change, Piracy, Cyber Attacks

Related Stories

Recommended For You