Risk managers have adjusted approaches to combat hacking; express concerns about the security of ‘Internet of Things’ devices
Foster City, Calif. (May 19, 2016) – Nine in ten businesses experienced at least one hacking incident in the past year, according to a new survey of business risk managers released by The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re. The number of attacks increased 21 percent from 2015.
“Hackers are even more relentless,” said Eric Cernak, Cyber Practice Leader for Munich Re. “Sixty-four percent of risk managers say they have experienced more than six hacking incidents in the last year — up from 32 percent in 2015. U.S. businesses are under constant assault.”
The cyber study shows risk managers are worried about the safety and security of Internet of Things (IoT) devices, with only 28 percent saying they are safe for business use. Despite these concerns, more than half (56 percent) of the businesses implemented or plan to implement such devices.
“As businesses use IoT devices to improve productivity and efficiency, they must think about the security costs,” said Cernak. “Hackers are always looking for ways to access company business systems and connected devices provide additional infiltration points. It’s important to control security features on these devices and monitor employee use.”
Primary concerns about cyber technology include the loss of confidential information (44 percent), government intrusion (27 percent) and service/business interruption (17 percent).
When asked about the risk management services they have deployed to combat cyber risk, risk managers point to encryption (44 percent; up from 25 percent in 2015); intrusion detection/penetration testing (28 percent; down from 32 percent) and employee education programs (12 percent; down from 25 percent).
For additional protection, 50 percent say their business has either purchased cyber insurance for the first time or increased its level of coverage in the last year. Thirty percent of businesses do not have any level of cyber insurance coverage. Primary reasons for not adopting coverage include its perceived complexity (44 percent), lack of a sufficient threat (34 percent) and cost (22 percent).
Hartford Steam Boiler’s 2016 Cyber Poll was conducted on-site at the Risk and Insurance Management Society Conference (RIMS) in San Diego, CA on April 11, 2016. It is intended to represent the sentiments of 102 risk manager attendees who participated through in-person interviews, and represented small (1-99 employees), mid- (100-999 employees) and large-sized (1,000+ employees) businesses in the following industries: manufacturing; financial and professional services; retail; technology; government and military; education and public entities; aerospace, defense and technology; and healthcare.
Hartford Steam Boiler (HSB), a part of Munich Re since 2009, is a leading engineering and technical risk insurer providing equipment breakdown insurance products, other specialty coverages, and related inspection services and engineering consulting. Founded in 1866, HSB’s difference is grounded in extensive technical knowledge with over 50 percent of its staff engineers, inspectors and technical personnel around the globe. We leverage our knowledge to anticipate future risks and develop a range of specialized solutions that enable our clients to build deeper and more profitable customer relationships. HSB holds A.M. Best Company’s highest financial rating, A++ (Superior). For more information, visit www.hsb.com.
About Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2015, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.1bn on premium income of over €50bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €28bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2015, ERGO posted premium income of €17.9bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments (excluding insurance-related investments) amounting to €215bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
Source: HSBTags: cyber risk, Hartford Steam Boiler (HSB), survey