4 <strong>InView</strong> | An independent eye on insurance Ed Lewis, Partner 020 7882 1992 ed.lewis@weightmans.com © Copyright. Weightmans <strong>2015</strong>. All rights reserved.
Issue 2 | <strong>Autumn</strong>/<strong>Winter</strong> <strong>2015</strong> 5 CYBER RISKS – OLD RISKS MANIFESTING IN NEW WAYS The threats posed by cyber risks to UK businesses are immense. There is a need for the government to raise awareness and for insurers to develop more sophisticated policies. Ed Lewis explains why. Mankind craves convenience and across the globe increasingly relies on computers, smartphones and the internet to deliver it. In fact, technology dominates our lives and provides surrogates for many of our daily activities: or gain access to our digital assets is vulnerable, especially if we connect it to the Internet. Just like your home – anyone can try to get in. Whether they succeed and what they can do once inside, however, is down to our behaviour and security. ■■ ■■ ■■ ■■ ■■ spaces for working and socialising communication access to knowledge and information storage of important records and data managing our money. In terms of scale, the potential is also vast. The average smart phone fits in your back pocket, yet has the equivalent capacity of about 5,000 filing cabinets! Technology therefore makes traditional crimes such as theft, fraud, blackmail and vandalism not only easier but also more lucrative than ever before. The internet also makes it possible to commit them remotely and with total anonymity. However, advancements in technology have also heralded a new danger, cyber threats. We’ve all heard about this danger, but what is it, really? Essentially it’s the new way in which technology exposes us to “old” risks because of how we use it and what we use it for. New phrases to describe this phenomenon have emerged, such as cyber fraud, cyber espionage and hacktivism. However, general understanding and knowledge of cyber threats within the insurance market (including brokers, underwriters and policy holders) remains limited. What exactly are cyber risks? Increasingly we store the things we value most in digital form. Examples include data, such as personal information, money and trade secrets. Guarding against cyber risks is therefore principally about protecting these digital “assets” from deliberate or accidental harm. Not only are digital assets easier to manage, they can be accessed, copied or shared at the click of a button. But beware of this convenience; any device that we use to store Sadly then, cyber safety is too often overlooked in favour of efficiency. Just because the dangers posed by technology are not always visible, it doesn’t mean they’re not there. Better rules to develop and govern our behaviour when using technology are therefore essential. So remember, next time you hear someone mention cyber threats don’t dismiss them as an IT problem. These threats come from the abuse of technology: either deliberate abuse to facilitate criminal activity or accidental abuse through human error, but both can have equally disastrous consequences. The things you value, or which others value and you look after, could be at risk! It’s also about culture: how we allow the abuse to happen and our efforts at prevention. We can approach cultural change at various levels: individually; organisationally; nationally; even globally. But with the threats so prevalent and constantly evolving, ultimately change is needed if they are to be controlled. So remember, next time you hear someone mention cyber threats don’t dismiss them as an IT problem. These threats come from the abuse of technology.