New Cyber Risk Report Finds the World Living in Cyber Subprime
FOR IMMEDIATE RELEASE
April 16, 2014
Groundbreaking, new Atlantic Council – Zurich Insurance Group report identifies aggregate of interconnected risk that “can no longer be ignored”
WASHINGTON – The world is living in cyber subprime based on an aggregate of interconnected risks that can no longer be ignored, according to a pioneering, new report from the Atlantic Council and Zurich Insurance Group entitled, Beyond Data Breaches: Global Interconnections of Cyber Risk. The report, released today, is the result of a year-long study by the Atlantic Council and Zurich on interrelated cyber hazards and underlying risks and was designed to better prepare governments and businesses for the cyber shocks of the future.
As the Internet increasingly connects with real life and permeates all facets of society, cyber attacks can affect interdependent systems like electrical grids and global logistics systems. Through a combination of stable technology and dedicated technicians, the Internet has been resilient to attacks on a day-to-day basis, creating an extended period of reliability, Yet, as we approach nearly absolute dependence on the Internet, cyber attacks of the future can and will affect globally interconnected systems. This Internet of tomorrow will be a source of global shocks for which risk managers, corporate executives, board directors, and government officials are not prepared.
“The recent Heartbleed vulnerability demonstrates the main message of the report,” according to report author Jason Healey, who serves as director of the Atlantic Council’s Cyber Statecraft Initiative. “The Internet is so complex and tightly coupled to the real world, it turns out we were all gravely exposed to a cyber risk in an obscure technology that few understand and we didn’t see coming. This time it was just passwords, but what happens once the internet is connected to the electrical grid or driverless cars?”
“We all need to look beyond our internal information technology safeguards to interconnected risks which can build up relating to various counterparties and external sources, whether they be customers, vendors, outsourced contractors, or parts of supply chains,” said Michael Kerner, CEO of General Insurance, Zurich Insurance Group. “That build-up could create a cascading failure not unlike the 2008 financial crisis. To protect the integrity and reliability of cyberspace – governments, the private sector and civil society – must work closely together.”
The groundbreaking report, commissioned by Zurich and written by the Atlantic Council’s Jason Healey, outlines several concrete steps that must be taken to overcome these inevitable shocks of the future and prevent what could be called a “cyber sub-prime” meltdown.
Recommendations to be resilient to cyber shocks include:
- Putting the private sector at the center of crisis management, since government management of cyber risk lacks the agility needed
- Developing plans within organizations that have system-wide responsibility that ensure the stability of the system as a whole, rather than risks to an individual organization
- Creating redundant power and telecommunications suppliers and alternate ISPs connect to different peering points
- Investing in trained teams ready to respond with defined procedures
- Conducting simulations of the most likely and most dangerous cyber risks to better prepare
The Atlantic Council is a nonpartisan organization that promotes constructive US leadership and engagement in international affairs based on the central role of the Atlantic community in meeting today’s global challenges. For more information, please visit AtlanticCouncil.org and follow us on Twitter @AtlanticCouncil.
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.