#CyberFLASH: Lack of cyber data a current barrier to more comprehensive offerings: Kovacs

large_cybersecCanada’s property and casualty insurance industry has taken important strides to provide coverage for select cyber security risks, but the lack of data around other related threats has prevented insurers from moving forward with more comprehensive offerings, attendees of an Insurance Institute of Canada (IIC) forum in downtown Toronto heard Thursday.

Paul Kovacs, founder and executive director of the Institute for Catastrophic Loss Reduction, and president and CEO of the Property and Casualty Insurance Compensation Corporation, suggested that barriers currently exist and those hurdles will not be cleared absent the industry gathering additional information.

“In the last few years, the industry has really stepped up and offered solutions for breach attacks, for identity theft. There are some key areas where the industry is now playing a role,” Kovacs said during IIC’s inaugural Emerging Issues Forum, the first of a series of discussions that will deal with emerging issues of interest to those in Canada’s p&c industry.

With regard to Canadians and Canadian businesses buying breach and identity theft coverage, “our sense over the next five to 10 years is that’s going to grow very quickly,” he told forum attendees.

What has changed? Kovacs pointed to the “combination of companies doing a much better job in terms of having a product that is really accepted and wanted,” a large number of high-profile attacks, growing interest from governing bodies like Boards of Directors and third parties such as regulators and others asking and expecting cyber coverage to be in place.

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#CyberFLASH: Insurance Institute of Canada report encourages p&c organizations to build cyber resiliency; cites business opportunity in expanding coverage

aCanadian property and casualty insurance organizations should bolster the defences of their organizations and those of their clients against cyber threats by developing a culture of cyber security, recommends a new research report issued Tuesday by the Insurance Institute of Canada (IIC).

“Insurance organizations are encouraged to build a corporate culture of cyber security that includes actions to address technological threats and security training for employees,” notes an IIC statement announcing the release of Cyber Risks: Implications for the Insurance Industry in Canada, which assesses cyber risk from the perspective of the Canadian p&c insurance industry.

The research report cites a study by Intel’s McAfee and the Center for Strategic and International Studies, Net Losses: Estimating the Global Cost of Cybercrime, which estimates the global cost of cyber crime in 2013 at US$375 billion to US$575 billion. “The global impact of cyber crime is similar to estimates by the United Nations of the international production, trafficking and sales of illicit drugs (US$400 billion) and the worldwide damage resulting from vehicle collisions (US$518 billion),” states the report.

According to the report, the most common forms of cyber attacks were theft and other data attacks, malware (phishing and pharming) and mechanisms to infect computers (viruses, worms, Trojan horses). The report notes that in 2013, the 3,700 clients of IBM’s Managed Security Services experienced seven or eight cyber incidents each month, on average. About half of those attacks – including scams to steal credit card information, website vandalism, corporate espionage and denial-of-service attacks – were directed at the manufacturing (27%) and financial services (21%) industries.

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