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Lights out on complacency
Hackers have brought down a power grid for the first time. The attack on Ukrainian utility company Prykarpattyaoblenergo’s left approximately 700,000 people without power for several hours just before Christmas. As the first successful large-scale cyber attack on an electrical utility, it comes just months after Lloyd’s of London Business Blackout research warned of the potential impact of such an attack on the US power grid.
EU data privacy laws move a big step closer
Four years after the proposals by the European Commission, December finally saw agreement between the Commission, the European parliament and the Council of the European Union on the law that will transform data protection rules in EU. Many of the details, such as the introduction of compulsory notification of data breaches are familiar from earlier discussions. Among the big developments, however, is the fact that potential fines for breaches of the regulation are to be set at up to 4% of a company’s worldwide turnover. Less than the 5% in early proposals, it is, nevertheless, double the 2% of more recent drafts.
Cyber risks data is improving
Risk models may be young but claims data is developing as the market matures. The shortage is result of a reluctance by companies to share claims data, a failure to collect it consistently, the constantly evolving threats, and the relative youth of the market; while cyber insurance has now been around for 15 years, it cannot yet call on the 30, 40 or 50-year histories other lines have.
Denial of service attacks surge
A group calling itself New World Hacking claimed responsibility for an attack on the BBC’s website that left it unavailable for several hours on New Year’s Eve. The group aims to take down sites affiliated with terrorists, but was testing its capabilities when it took down the BBC’s site, it explained in a Tweet.
New Year predictions
There are many predictions for what 2016 will look like for cyber risks and insurance. On the risks side, we’ve covered many of the trends such as the rise in cyber extortion and Internet of things before. As for insurance, some predict premiums will “rocket” in the coming year. With capacity and new players continuing to flood the cyber market, a premium rise across the board seems unlikely. However, underwriting is likely to become more cautious and sophisticated.
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