The industry needs to wake up to cyber and brand damage – and think up new solutions

Reputational damage caused by cyber risks remain the industry’s the top concerns, but the severity of the risk may not be fully understood by risk managers, according to International SOS group general manager for risk and insurance Franck Baron.

Baron (pictured) said that risk managers need to embrace and understand cyber risks fully as attacks can have a knock-on effect.

He said: “The new risks we are looking at are linked to the cyber and data privacy. When you are dealing with critical information within your system, you want to ensure that you are doing the right thing in terms of security and so information security is a key aspect in our company.”

He added: “It is very topical so everyone is talking about it, but I am not sure if all risk managers understand the potential magnitude of this risk and this is what I would like my colleagues to be a bit more aware of. It is a major threat and it may have a huge impact on the reputation of their respective companies.”

Cyber insurance is relatively new, but Lockton believes that protecting a company from reputational damage caused from cyber attacks can be achieved by bringing together insurers, brokers and underwriters.

Tighter industry partnerships are key, according to Lockton president and chief executive John Lumelleau. Speaking about a recent meeting at the White House – which brought together global insurers and brokers such as Arthur J Gallagher, Willis and Marsh to advise on the US government’s cyber security framework – Lumelleau said: “The nature of [cyber risk] can run the gamut from product recall to sickened consumer …

“Our efforts around [cyber] have led us to discussions within the White House where the government is beginning to look at partnerships and how cyber exposures in general can be addressed.”