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A global cyber security expert has warned brokers about the incalculable risks associated with the space, saying there is simply no limit to the potential damage that can occur.
Speaking at a broker webinar hosted by Emergence Insurance, industry veteran Scott Bailey drew attention to three of the most pressing threats, globally.
The first, he said, is the systemic nature of cyber – even a single attack intended for one specific target can quickly and easily cascade across countless systems, causing widespread havoc.
“Along the air of systemic risks, cyber really knows no boundaries and it’s not geographically confined,” said Bailey, who is the managing director of Markel International’s cyber operations. “There is scope for cyber threats to hit whole portfolios or global eclectic mixes of companies – all from the same self-propagating virus or issue.”
Bailey, who was formerly a senior underwriter and head of emerging risks within the firm, also pointed to silent cyber as another key threat.
“Silent cyber is the presence of cyber exposure in a non-cyber policy,” he explained. “So, for example, a marine or home insurance or commercial package policy where there is no cyber exclusion or no cyber cover, leaving it very open to interpretation and indeed to systemic exposures as well.”
Finally, Bailey – who has been in the insurance space for over 25 years – warned about state-sponsored hacking as the next big risk on the horizon.
“I think state-sponsored actors and state-sponsored hacking is generally a big issue for the world over,” he told brokers listening to the webinar.
“If you look at things like NotPetya, which occurred a year or two ago now, and was widely alleged to be from Russian intelligence aimed at Ukrainians – that virus became widespread all too easily.”
Released in June 2017, NotPetya went on to cripple countless multinational companies – including shipping giant Maersk, food producer Mondelēz and pharmaceutical giant Merck – with many facing costs into the hundreds of millions. Overall, the total damages were estimated at around $10 billion.
“There’s also the additional point on attribution and nation states being attributable to any of these attacks, or whether they ever admit to any of them,” said Bailey. “Those are the three, in my eyes, that are the biggest headaches.”
