The Challenge of Cyber risk management

Cyber risk has risen rapidly to the number one spot alongside business interruption. As business is largely built upon the workings of information systems nowadays, it is obvious that the two are interconnected.

The threat perceived from a particular risk often correlates with the severity of the risk. The degree of threat perceived in the moment is likely even more strongly affected by the associated uncertainty than by the severity of the consequences. What kind of attacks are they? Who is behind them? What causes one to be targeted? Where are they happening? How can the attack be prevented?

The answer is simple: Cyber risk affects everyone, everywhere, and no certain way to prevent it exists.

The global business environment brings increased cyber risk

One of the greatest challenges in cybersecurity is the global extent of the digital environment. You are just as close to the local lone wolf hacker as you are to organised crime or to state-controlled industrial espionage from abroad.

Technical solutions are also similar worldwide, which makes the development of malware and attacks easier. Global businesses use English as their operating language almost without exception, which helps hackers’ activities transcend cultural boundaries.

Your own measures are not necessarily enough to prevent an attack

The entwinement of the world’s networks also means that even if you were to do everything within your capacity well and succeed in stopping a cyber-attack, those attacks targeted at other members of the network could still impact your business. Many large cyber-attacks have reached their targets through a supplier, in cases where the company’s own operations were well-protected. Because of this, you should give particular scrutiny when selecting a supplier, while also taking into account your dependence on your own business partners.

Cyber risk control is based on technical solutions and personnel know-how

As something that manifests primarily in the digital world, the concept of cyber risk alone can be difficult for many to fully grasp. It is easier for the human mind to understand the consequences of a fire or injury, for example than the workings of interconnected information systems and security programs. A company’s own IT department or administrator is often a good partner to help you understand this risk. It is important to maintain a dialogue within the company between the IT department, risk management, and business operations in order to find a solution to this issue.

Cyber risk management is based on a balance between technical solutions and personnel training. Technical safeguards on their own are of no use if personnel are unable to identify phishing e-mails or executive impersonation. On the other hand, without technical safeguards, not even the most vigilant personnel will save the business from a successful attack. All of this makes risk management especially difficult.

Preparedness is also a question of expense, as cybersecurity expenditures can become endless. This is why it is important to understand the resources and systems most important for business and to direct the primary risk management measures towards them. Personnel should be trained such that the likelihood and possible consequences of an attack are kept at a minimum. Insuring helps to protect against financial consequences in the event of damages.

Insurance broker helps provide professional risk management

The proper way to address cyber risk is to recognise it, to use risk management to minimise its chances of success, and to be prepared in the event of an incident in spite of everything. At this point, a continuity plan can be made and an IT consultant hired in advance so that they will have all of the information necessary to assist in the event of damages. Crisis preparation plans can be practised with personnel, and an insurance plan can be made to redirect financial impacts away from the company.

A professional insurance broker maps out the risks to your business and the extent of your current insurance coverage, and assists in determining the cyber insurance best suited for your company. This way, you save time and effort, and protect your company from external and internal threats alike. With Howden’s cyber risk mapping, our experts identify and evaluate the most significant cyber risks to your business, and help you prepare for them.