As Guy Carpenter launches its new Cyber Solutions Specialty Practice, we review recent GC Capital Ideas stories on cyber.
Guy Carpenter Launches Cyber Solutions Specialty Practice: Guy Carpenter announced the launch of its Cyber Solutions Specialty Practice, which focuses on the development and delivery of innovative cyber reinsurance solutions to address the rapidly increasing risks associated with cyber security.
Cyber Risk and its Impact on Supply Chains: Cyber risks are not isolated and are usually connected to other risks. Many companies that are exposed to cyber risks are, for example, also exposed in turn to risks to their supply chain. Due to technological innovation and advances, many parts of a company’s or industry’s supply chain have become interconnected and automated. Technology is indeed a critical enabler of a supply chain’s operations. Therefore a cyber attack has the potential to put an entire company’s supply chain at risk. Cyber security and supply chain risk management must therefore be considered in conjunction with one another.
Cyber Insurance Protection: Transferring risk through insurance is the last step in the risk management process. Traditional insurance products have fallen short of providing protection that is required as solutions for property, fidelity, general liability and professional liability only cover very clear and precise areas of risk. While there may be overlapping coverage for some cyber risks, various exclusions mean they generally do not cover privacy and cyber perils.
Cyber Risk Management: Keeping pace with the constant evolution of technology is one of the main challenges associated with cyber risks. As demand for comprehensive cyber risk insurance cover grows, it is important that insurers closely monitor technological changes in order to provide adequate supply and cover.
Cyber Attacks - Vulnerable Data and the Consequences of a Breach: The types of data at risk from cyber attacks include consumer data, employee information and business partners’ information.
The Rise of Cyber Attacks: Cyber attacks are on the rise, with several recent high-profile examples. Indeed, 2012 broke the previous record in terms of the number of reported data loss incidents. With 2,644 incidents recorded through mid-January 2013, 2012 more than doubled the previous highest year on record (2011). Furthermore, the extent of attacks is likely to be far higher since around 20 percent of reported incidents did not disclose the number of records involved.
Range of Cyber Risks: Cyber risks range from legal liability and computer security breaches to privacy breaches of confidential information. Data breaches typically involve the intent to either copy, extract or destroy data. However, the risks that companies face transcend simple data incidents and often include the broader range of perils associated with the structural vulnerability of our economy to failures of technology generally. Further risks include cyber extortion, cyber terrorism, loss of revenue due to a computer attack, recovery costs, reputational damage and supply chain disruption.
Cyber Risk: Rapidly developing computer technologies and the unrelenting evolution of cyber risks present one of the biggest challenges to the (re)insurance sector today. Liabilities from cyber attacks and threats to the data security of cloud computing and social media have become key emerging risks for carriers. The unprecedented rise in cyber attacks, in addition to the threat cyber risk poses to global supply chains, has seen the cyber insurance market grow significantly in recent years.