The world we live in is one of shifting risks as new hazards emerge while older ones recede or evolve. Keeping track of it all is difficult, which is why Beazley has set out to produce a series of in-depth reports to look at how business leaders feel about certain risks today.
Joining Intelligent Insurer on the Re/insurance Lounge, the on-demand platform for interviews and panel discussions with industry leaders, to talk about these reports was Raf Sanchez, global head of cyber services.
Sanchez sat down to talk about the first report, “Spotlight on technology risk”, which is available now on Beazley’s website.
The report found that technology risk was the thing most concerning organisations. It reads: “Well over a third (37 percent) of business leaders in the UK and US perceive it to be their most pressing area of concern now.
That proportion rises to 39 percent as we look ahead 12 months.”
“There’s definitely a change especially among smaller organisations,” Sanchez said. “There’s a growing realisation that as cyber attacks have become more commoditised and automated, they have become very easy to conduct.
Years ago if you wanted to send 200,000 letters, you had to engage a mailing house to print, address, and send them. Now you can do that with an online service for about £500.”
Cybersecurity is about more than the stereotypical large scale, end-of-days attack that the word is often associated with, he explained.
“Within most cyber policies, the incidents that are covered and the triggers in the policies are pretty wide. With one of our policies, you’re looking at any incident that involves a security element within an environment that involves data protection or confidential information issues.
“This often involves paper records. We have handled many of these incidents,” said Sanchez.
“Companies have legal obligations in respect to these records. Equally, we do a lot of accident disclosures, which are sometimes called a ‘fat finger error’, where something is sent to the wrong person or the wrong documents are attached to an email.”
All of this has shifted in the last 18 months as the COVID-19 pandemic pushed many companies to having their staff work from home, a trend that seems to be continuing even as the world begins to recover. The old physical barriers, said Sanchez, are no longer there.
“Everyone is now outside the wall. A company’s staff and its resources are either in the cloud, working from coffee shops, or logging in from home.
“In order to be productive, employers have been forced to provide flexible ways of working that they did not have before. There are many things that are changing in the wider world.”
“Beazley is investing a lot of time, resources, and capital into providing services that can help companies build cyber resilience.”
Raf Sanchez, Beazley
Addressing concerns
It is within this sphere that Beazley is trying to stake its claim, says Sanchez.
“We’re not just preaching to our insureds. We’re trying to understand what’s happening and looking at organisations to see how they’re changing and adapting. It’s only by doing this that we can recognise what we may need to change in the insurance coverage we’re offering.
“It may even be that we need to add services in places in order to address a particular cause for concern,” he said.
A key issue has been overconfidence, where some insureds believe that the security is not lagging. Unfortunately, Sanchez said, this can lead to blind spots.
“If we look at the tens of thousands of incidents that Beazley has dealt with, and is continuing to deal with, what we see is the appearance of resilience. These are organisations that have an incident response plan, that have backups, some sort of password management and password complexity issues.
“But the problem is that there’s always something they haven’t done and it’s not negligence or a lack of action—it’s simply that there are huge changes that affect every stakeholder and, unfortunately, they’ve not been able to pivot and adapt as quickly as the attackers can,” he explained.
Clearly, there is a lot of work to be done in this space and cybersecurity policies are increasing in number and volume. The talk about cybersecurity has come more front and centre in recent years.
“We have realised that waiting for incidents to occur is no longer acceptable,” said Sanchez.
“That’s why Beazley is investing a lot of time, resources, and capital into providing services that can help companies build cyber resilience. Sometimes, these services are introductions to vendors who have solutions and technology solutions.
“Sometimes, those are connecting stakeholders within an organisation with experts who can help them understand where the real risks are. The most important things to understand are what the risks are and where the companies are lacking in resilience. Then you can identify what you can do about it.”
To view the full Re/insurance Lounge session click here
Raf Sanchez is global head of cyber services at Beazley. He can be contacted at: raf@beazley.com
Image: Shutterstock / Vasin Lee
