10 February 2015 Insurance

Cyber is no longer just about data breaches

Cyber risk is no longer just about data breaches and must be addressed as a global concern.

That is the opinion of Graeme Newman, director, CFC Underwriting, speaking at the Cyber Risk Insurance Insights Conference in London today.

Last year saw $350 million headline losses by cyber alone, with risks spreading beyond just a loss of data.

“It's not just a US issue; the net is tightening around the world and it's about more than just data breaches,” said Newman.

Newman spoke of the recent Sony attack, which caused $15 million of losses just from a system clean up exercise and the British Airways system upgrade, which resulted in three days of baggage handling systems not working, and 20,000 bags lost.

Brian Lord, manager director at PGI Cyber, spoke of the lack of understanding behind the term 'cyber security', and asked whether the audience believed that the ability to counter these risks had advanced over the last five years. The audience response mostly suggested that it hadn't.

“So how do we address this when we haven't made much progress in five years?” said Lord. “The ability to solve this lies way outside the UK government; it sits with the private sector.”

Lord also spoke of the speed at which cyber is progressing.

“A cyber threat is a risk which can undermine the health and viability of state,“ he said. “The UK has now recognised that cyber threat is a tier one threat.”

Looking ahead, Lord said that an important factor in the development of the cyber sector is a better understanding of what cyber risk entails.

“The decision makers do not understand this issue enough. Primarily because this generation has a host of decision makers and leaders, but they have not grown up with it, therefore it does not come naturally to them,” he said. “The ability to make risk management decisions at the speed of which they are occurring does not happen quick enough.”

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