Businesses urged to see through fog of war to understand cyber cover benefits

The UK cyber growth leader at broker Marsh says the ongoing debate over the exclusion of cyber war risks is harming the ability for brokers and insurers to get across the message as to the value of the wider cyber covers.

Speaking in London Gareth Bateman (pic) made his comments as the broker held a briefing on the current and future direction of the cyber market. While there is much to be positive about in terms of the response by the insurance market to the demand for cover the issues around the announcement by Lloyd’s that it was examining its approach to attack which arise out of war or specific attacks by state backed operators against the infrastructure of a rival nation continues to be the main topic of conversation.

“As we discuss the risks with clients the focus in the issue of war coverage in in many ways a distraction,” Bateman said. “It is a very important it also very small part of the cyber coverage offered by the market which remains broad. It is therefore frustrating that the issue if taking the out of the room when we are looking to have a much broader discussion without clients in the risks they face and understanding the solutions available.”

Bateman said that talking to their corporate clients the broker was finding that cyber risks were increasingly viewed as a major threat to their businesses and that the threat remained real. He added that company management needed to understand that the dynamic nature of the cyber risk threats the world faces mean that there will not be a time when a business can say they have achieved a position of security and can ignore the threat.

He added the risks are fairly common among all organisations.

“Technology comes with risks,” Bateman said. “Every industry type has seen a fundamental shift the use and therefore the reliance on technology in their operations. Technology in itself have become a vulnerability.”

From retail systems, payments systems and warehousing solutions technology is playing an ever bigger part with heavy industry and manufacturing using supervisory systems to manage production and production lines.

The threat is also increasing added Bateman with cyber security experts witnessing  a dramatic change as the ransomware groups have become more sophisticated and professional.

“They have become more sophisticated,” he explained. “They will enter a system and encrypt  the company’s data. They will then look to sell the company the key to unlock the encryption. However, as firms increasingly back up data to enable them to replace the data that has been encrypted the criminals are now warning that if they do not pay then they will sell the access they used to encrypt the company’s data to another gang raising the threat of repeated future attacks.

“We cannot expect that to change. It is a continuing battle for businesses to stay ahead of the curve. It is a full time job.”

Bateman said: “Some organisations see cyber as a tick box exercise you address and then park. It is not something you can close and park at any point.”

He added that the key will be fore the insurance industry to use the data and claims experience to feedback to businesses in order to support them in the design of more robust security systems which will better be able to meet the risks.

“We will be asked to do more to support clients with data feedback and I expect that to be a constant discussion in the year ahead.