This is a critical time for the Canadian insurance industry to talk about cyber security.
Cyber warfare is an emerging risk to the critical infrastructure that is essential to support society. As Eric Schmidt, chief executive of Google famously noted, “The internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy we've ever had.”
The insurance industry is at the frontlines of cyber risk. In fact, the Insurance Institute recently published the first in a series of Emerging Issues Research Reports; Cyber Risks: Implications for the Insurance Industry in Canada provides current context, addresses the unknowns, and advocates for the insurance industry to take action.
Just last year, cyber security was not included in the top 10 most important issues facing the p&c insurance industry Canada; today it ranks third, and is considered the risk most underestimated by businesses.
As we look into the future, cyber risks are expected to increase for a number of reasons. One being that many of the tools required to build an attack on global networks are readily available online, and two that the potential rewards from cyber crime continue to grow rapidly. The interconnectedness of our various devices in the Internet of Things provides new entry points to the system, and increases our vulnerability.
This report assesses the relationship between cyber security and the insurance industry in Canada, and answers the following questions:
• What are the most common forms of cyber attack?
• Who are the cyber criminals and what are they after?
• What are the losses experienced in cyberspace?
• Why are severe disruptions expected to increase?
• How can insurers improve their cyber defenses?
• Why is the cyber insurance market now growing?
• How will evolving regulations affect cyberspace?
Ensure you are prepared to handle the issues surrounding cyber risk and your clients.
About the author
The report is authored by Paul Kovacs, who is widely known and respected in the industry as the founder and executive director of the Institute for Catastrophic Loss Reduction (ICLR), president and CEO of the Property and Casualty Insurance Compensation Corporation (PACICC), and Adjunct Research Professor, Economics, at the University of Western Ontario.