Tag: cyber-risk management

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Ratings agency starting to factor in Cyber risk profile
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Boards Push Insurers to Quantify Cyber Risks

Ratings agency starting to factor in Cyber risk profile

By Cameron Abbott and Wendy Mansell

A recent report released by Moody’s Investors Services has shed some light on which business sectors are most at risk for cyberattacks.

After assessing 35 broad sectors it was concluded that banks, hospitals, security firms and market infrastructure providers face the highest risk. This was based on levels of vulnerability and the potential impact an attack would have.

The key determinative factor for these sectors is that they all rely strongly on technology and the vital role of confidential information in their operations.

The financial repercussions following a cyberattack in each of these sectors is extremely significant when considering the costs of insurance, penalties, consumer impact, potential litigation costs, R&D and technological impact to name a few.

The financial market is so high risk because of the financial and commercial data it holds and ever increasing fact that its services are being offered digitally, across multiple platforms i.e banking mobile/smart watch apps.

On a similar note because medical records are primarily collected and held in electronic form hospitals are very attractive to hackers given the sensitive nature of the data.

While the industries should not be a shock to the reader, it is important for participants in those industries and for suppliers to those participants to realise the risk profile that attaches to them and have procedures in place reflective of those risk levels.  How one manages these risks in now likely to have indirect cost implications when you see ratings agencies like Moody’s assessing these sorts of areas. 

Boards Push Insurers to Quantify Cyber Risks

By Cameron Abbott and Rebecca Murray

US risk management firm Advisen recently held the Cyber Risk Insights Conference where insurers, brokers, corporate risk managers and CSOs came together to discuss the importance of company CFOs quantifying cybersecurity risks. Panelists included the risk managers of Merck and Time, who both classified cybersecurity risk exposure as a top danger faced by corporations. Time’s risk management department, for example, is working to quantify the company’s exposure to cyber attacks so that it can transfer some of the risks to insurers. However, Time’s director of risk management says culling all cyber-risk-management information together in a meaningfully predictive way is a challenging task.

Furthermore, gaining assistance from insurers about how to quantitatively define cybersecurity risk is also problematic as the insurance industry is only getting started on truly understanding how to forecast cyber losses. Cyber security practice leader for insurance broker Lockton Cos, Ben Beeson has revealed that insurers have only really become aware of the vast extent of loss that can eventuate when handling personal data this year. Keeping up with incredibly evolving and dynamic cybersecurity threats is sure to be an immense challenge for insurers. Read more here.

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