Zurich launches Cyber Risk Report
• The reliance on information technology has created a complex web of interconnected risks • Organisations must improve their responses to cyber risks to avoid a global shock similar to the 2008 crisis
The Zurich Cyber Risk Report, published in collaboration with the international think tank Atlantic Council, argues that cyber risk management professionals need to look beyond their internal information technology safeguards to interconnected risks which can build up relating to counterparties, outsourced suppliers, supply chains, disruptive technologies, upstream infrastructure and external shocks.
Zurich warns that a build-up in these risks could create a failure on a similar scale to the 2008 financial crisis. Such interconnected risks are compounded when a company outsources the management of its servers, information technology and cyber security to focus on its core activities. Little information may be known about the third party’s information security or business continuity safeguards and it may also, in turn, outsource activities to other companies.
The report calls for organisations to incorporate the best ideas from financial governance such as creating a G20+20 Cyber Stability Board to enhance cyber risk management and identify and improve the governance of G-SIIOs (Global Significantly Important Internet Organisations).
Comments, Christoph Leuzinger, Executive Head of Global Corporate at Zurich South Africa: "This research further solidifies the findings of the Global Risks 2014 Report, released earlier this year by Zurich and the World Economic Forum (WEF), which lists cyber attacks as the fifth most likely risk to face the globe in the next ten years. With the internet becoming increasingly coupled with the real world, the nature of cyber risk is undergoing a fundamental change – only with a holistic view on risk are we able to build resilience to the changed cyber risk environment.”
The Zurich Cyber Risk Report identifies the following seven interconnected risks:
"Cybercrime poses a growing threat to the individuals, institutions and companies embedded in a complex and international online environment and will have a profound effect on the short-term insurance industry in particular,” adds Leuzinger. "Insurers who stay ahead of market trends will, ultimately, lead the way in helping their customers mitigate cyber risk."
Download the full Zurich Cyber Risk Report here.
