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Insurers Eyeing Cyber Coverage
Insurers are eagerly monitoring exponential growth in the tiny cyber coverage market but their lack of experience and skills handling hackers and data breaches may keep their ambitions in check.
High profile cases of hackers seizing sensitive customer data from companies, such as U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.
Increasingly, corporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.
The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.
Those numbers represent a sliver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.
The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.
“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”
Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.
“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.
Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS Labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.
Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target, Neiman Marcus, and other merchants, he added.
Sony Exits PC Business
Sony will unload its struggling PC business to a Japanese investment firm, the company said Thursday, raising the possibility that the “Vaio” brand could all but disappear from markets outside Japan.
Tokyo-based investment fund Japan Industrial Partners (JIP) will operate the Vaio PC brand under a newly established firm and initially sell PCs in Japan only.
In another reform aimed at bolstering its restructuring efforts, Sony also said it would turn its beleaguered TV business into a subsidiary.
The moves come as Sony said it now expects a net loss of $1.1 billion for the year to the end of March, a reversal of its October profit forecast.
Vaio, which Sony introduced in 1996, looks set to vanish from most markets, at least for short term, as the new company will initially concentrate on selling consumer and corporate PCs in Japan. Whether or not Sony will continue to produce products under the Vaio brand remains to be seen, Sony said.
Although Sony is selling its PC business, it will continue to produce tablet computers, part of its renewed focus on mobile devices including smartphones.
Sony did not put a price on the sale. Sony will take a 5% stake in the new firm, it said.
Sony will stop making and selling PCs after its 2014 Spring lineup launch, but about 250 to 300 Sony staff, including some from a subsidiary that produces TV sets, cameras and computers at factories in Japan, will be hired by the new company, which is to be based at the hub of Sony’s current PC business in Japan’s Nagano Prefecture.
Meanwhile, Sony said it will turn its TV business, which has faced a decade of losses, into a wholly owned subsidiary by July 2014.
RIM’s Troubles May Not Be Over
October 27, 2011 by admin
Filed under Smartphones
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Law firms in the United States and Canada are considering possible consumer lawsuits against Research In Motion Ltd for last week’s BlackBerry outages, which for three days crippled email and messaging for tens of millions of users around the world.
Consumer lawyers say they are investigating whether customers have common claims against the BlackBerry manufacturer and might be able to band together in a single lawsuit.
While the outage did not rise to the level of seriousness comparable to a dangerous medication or tainted food, it inconvenienced and angered customers. Frustrated BlackBerry users, turning to blogs, message boards, Twitter and Facebook, complained about losing important emails and missing meetings last week.
Law firms are considering breach-of-contract or consumer-fraud claims, attorneys said.
A breach-of-contract claim could argue the company failed in its obligations to provide service and could include carriers for BlackBerry service as additional defendants, said attorneys exploring litigation against RIM.
SEC Asks Companies To Disclose Attacks
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U.S. securities regulators formally asked public companies for the first time to disclose cyber attacks against them, following a trend of high-profile cyber crimes.
The Securities and Exchange Commission issued guidelines on Thursday that laid out the kind of information companies should disclose, such as cyber events that could lead to financial losses.
Senator John Rockefeller had asked the SEC to issue guidelines amid concern that it was becoming hard for investors to assess security risks if companies failed to mention data breaches in their public filings.
“Intellectual property worth billions of dollars has been stolen by cyber criminals, and investors have been kept completely in the dark. This guidance changes everything,” Rockefeller said in a statement.
“It will allow the market to evaluate companies in part based on their ability to keep their networks secure. We want an informed market and informed consumers, and this is how we do it,” Rockefeller said in a statement.
There is a growing sense of urgency about cyber security following breaches at Google Inc, Lockheed Martin Corp, the Pentagon’s No. 1 supplier, Citigroup, the International Monetary Fund and others.