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Advisen Conference Covers Cyber Risks
The cyber world, along with all of its potential complications and setbacks, was the focus at a recent Advisen conference held at the Hyatt in New York City.
For the first time in seven years, the results of an Advisen survey – released at the event by Zurich Insurance – showed a decline in how seriously C-suite staff views cyber risk.
• Sixty percent of the risk professionals surveyed said executive management views cyber risk as a significant threat to their organization. This is down from 85 percent in 2016.
• Only 53 percent of respondents knew of any changes to their companies’ cybersecurity systems in response to the high-profile attacks that took place in early 2017.
• Growth in the pu rchase of cyber insurance has gone stagnant after a steady six-year increase from 35 to 65 percent.

2017 has seen several high profile cyber events, with data security losses impacting millions of consumers’ personal information, and malware and ransomware attacks that swept through businesses shutting down network systems, and in many cases, slowing or actually halting business operations. Last year the average cost of a cyber-related business interruption loss reached $3.7 million in the health care industry alone.
Banking New York chatted with three very interested observers at the conference for their takes on cyber threats going forward.
“There was a 20 percent dip in the perception of cyber risk as a significant threat by c-suites and executive leadership. That was a surprising result for us,” said Erica Davis, head of specialty E&O for Zurich North America. “The New York state financial institution regulation that recently passed is the strictest in the nation and I believe will set a new standard for other statutory requirements going forward.” Davis pointed out that heavily regulated and consumer classes of business such as banking and health care have become early adopters of cyber insurance products.
“Much has been said about infighting between various agencies regarding cyber regulation,” said Molly McGinnis Stine, partner, Locke Lord. “I don’t know if I would call it infighting, but equally motivated parties trying to come up with good solutions. They all need to coordinate and talk to each other. State officials have encouraged the federal government to allow states to be more protective if a state so chose.”
“Businesses must realize that threats are evolving,” explained Davis. “They no longer are just centered on privacy data and integrity issues. Business continuity and interruption threats are at the forefront of the threat environment. The ransomware attacks during the summer have demonstrated that.”
Ted Augustinos, who advises clients on privacy and data protection, cybersecurity compliance and breach response at Locke Lord emphasized the new reality for financial services and other sectors. “Firms will have to continue to up their game and invest in new technologies. It also means increased awareness of the threat environment and the training of employees because the human factor cannot be taken out of the equation.”
As for whether top-level employees should be held accountable, McGinnis Stine said, “It needs to be an all entity endeavor. Whether it be the CEO or the newest employee, all are part of the solution and must protect what information they have and decide what information to retain in the first place.” Stine said the New York DFS regulations are clearly a significant change. “They have served as model for other stets to consider and for other industry sectors”
Going forward, Stine advised firms not to tackle cyber issues in-house. “Even well-equipped companies are self-defeating if they try to do it all themselves. There is now a tendency to turn to lawyers and crisis communications experts.”■

Posted on Friday, December 01, 2017 (Archive on Thursday, March 01, 2018)
Posted by Scott  Contributed by Scott
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