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Risk Insider: Jon Hall

Cyber Threats: 5 Questions Every Risk Manager Should Ask

By: | October 3, 2017 • 3 min read
Jonathan W. Hall is chief operating officer at FM Global. He oversees FM Global’s insurance operations and insurance staff functions, as well as the FM Global Resilience Index, a data driven resource that ranks the business resilience of 130 countries and regions. He can be reached at [email protected]

Questions around cyber risk can be dizzying now that it has become a business concern from the board level down.

In May and June 2017, two separate large-scale cyber attacks put the world on edge. The first attack employed so-called WannaCry ransomware; the second was a new strain of sophisticated malware commonly called Petya. Both caused widespread disruption to business by exploiting the Microsoft vulnerability Eternal Blue.

With some estimates showing that data breaches will cost businesses a collective $2.1 trillion by 2019 (a 400 percent increase over 2015), the best way to prepare for a loss is to do everything possible to prevent one. Is your organization prepared for the next major cyber attack and the potential risk to physical property? There are a number of questions you should ask your property insurer:

1. Can you help me understand my exposure?

It’s important your insurer explains what it can do to help you manage your cyber exposure. Many insurance companies are partnering with cyber security consultants or risk management firms. Their focus may be on event detection and breach response, but more than just detection and response is needed. Insureds should know their risk, and be prepared and resilient.

2. Can you help me improve my cyber risk?

As the number of cyber attacks increase, more companies will be exposed to financial loss and damage to their business reputation if they are not prepared to defend themselves and respond swiftly when breaches occur. Your insurer should be able to explain how it can help you assess all aspects of cyber risk, including your physical security, approach to information security and reliance on internet-connected industrial control systems. And it should provide practical, cost-effective solutions to improve the risk.

With some estimates showing that data breaches will cost businesses a collective $2.1 trillion by 2019 (a 400 percent increase over 2015), the best way to prepare for a loss is to do everything possible to prevent one.

3. Does my current property policy cover cyber?

It’s important to know exactly what kind of cyber coverage you have. You may have purchased stand-alone cyber insurance products, and may also have some type of cyber coverage in your property or general liability policy. You will want to know which policy will respond in the event of a loss.

Different companies have different cyber exposures. For instance, if you are most concerned with personally identifiable information (PII), then you’ll want to be sure to purchase enough PII liability cover. Companies with manufacturing operations are generally concerned with cyber physical events and, therefore, will want to ensure adequate coverage in their property policy to cover those types of events.

4. How will my insurance policies interact if I have a loss?

In the event of a cyber attack, you could be confronted with a wide range of consequences: damage to your data, network interruption, third-party liability and so on. Your focus will be on remediation and getting your company back in business. What you’d like to remove from the equation is uncertainty over how your cyber policies will interact. For a risk manager, the key is to know how your company’s policies will react before a loss occurs.

5. Can you help support my cyber risk discussions within my organization?

As a risk manager, you play a vital role in helping your company better understand cyber risk and its impact on your organization. Your insurer should be able to provide you with cyber resilience solutions that allow you to collaborate with your chief information security officer (CISO), or equivalent, to understand the business impact cyber risk has on your organization.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession: Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

R&I: How did you come to work in risk management?

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

R&I: What is the risk management community doing right?

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I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

R&I: What could the risk management community be doing a better job of?

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

R&I: What was the best location and year for the RIMS conference and why?

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

R&I: What emerging commercial risk most concerns you?

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

R&I: What insurance carrier do you have the highest opinion of?

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Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

R&I: What have you accomplished that you are proudest of?

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

R&I: What is your favorite book or movie?

Favorite movie is definitely “Good Will Hunting.”

R&I: What’s the best restaurant you’ve ever eaten at?

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

R&I: What is the most unusual/interesting place you have ever visited?

The Grand Canyon. It is just so vast. A close second is Stonehenge.

R&I: What is the riskiest activity you ever engaged in?

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A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

R&I: What about this work do you find the most fulfilling or rewarding?

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

R&I: What do your friends and family think you do?

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]