Understanding Risk Management and Compliance, What Is Different After Monday, November 16, 2015

Understanding Risk Management and Compliance, What Is Different After Monday, November 16, 2015

I attend RiskMinds in Amsterdam from the 7th to the 10th of December, and I would really love to meet many members and friends there. <br /><br />MyRiskMinds is a portal that operates on your computer, smartphone or tablet before, during and after the conference. It launches 2 weeks before the event. You can send me a message and we can schedule a meeting in advance. I look forward to seeing you there. <br /><br />Today we have a very interesting speech from Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore. <br /><br />She explains why businesses must prepare for this new era of cyber risks with cyber insurance as a critical component in a comprehensive risk management strategy.<br /><br />Jacqueline said: "The rapidly changing global landscape has given rise to new and emerging risks which are mostly intangible, such as cyber, liability, supply chain and reputation.<br /><br />Cyber risk is the new catastrophe, estimated to cost the global economy between US$300bn - US$1 trillion annually. <br /><br />This is much higher compared to the average annual cost of natural disasters at US$200bn. <br /><br />More than just the burden of cost, cyber risks often bring about much embarrassment and reputational damage to the company and its clients.<br /><br />However, cyber risks are not adequately prepared for and their associated costs and impact under-estimated:<br /><br />A large majority of businesses believe that cyber risks are still not fully understood, and that risk readiness for cyber risk may have been "vastly overstated".<br /><br />Challenges exist around the quantification and pricing of cyber risks and their accumulation effects.<br /><br />Yet such risks are the most likely to occur and carry the greatest potential impact on operation, with the leading risks in terms of impact and likelihood being:<br /><br />Reputational damage from a sensitive data breach (impact on organisation's resiliency - 79%; likelihood 79%).<br /><br />Failure in a main IT data centre (59%; 77%).<br /><br />Disruption of online services due to a cyber attack (58%; 77%).<br /><br />Cyber risks thus present an enormous potential for insurance players - not just to capitalise on this insufficiently tapped space, but more importantly, to play a vital risk management role for the wider society:<br /><br />Increasing awareness of cyber exposures, as well as the forces of regulatory change, will underpin the rapid growth of cyber insurance. <br /><br />It is estimated that the cyber insurance market will grow 30% per annum to US$20 billion in annual premiums by 2025.<br /><br />Companies are increasingly focusing on cyber security issues. 63% of boards today actively address computer and information security, up from 33% in 2012.<br /> <br />The sharp increase is likely driven by the recent high-profile and well-publicized cyber incidents.<br />Governments are also gearing up to address the problem." <br /><br />Read more at Number 5 below.<br /><br />Welcome to the Top 10 list.