Stephen Catlin, head of the largest Lloyd's insurer Catlin Group, delivered a stark message to the business and the insurance communities this week. He said that the potential liabilities following a cyber attack are too large for insurers to cover.
Wow. Most company directors and executives have a general awareness of cyber risk: that attacks can have drastic impact on business. However, many directors and executives have probably felt that their insurances and risk plans have been sufficient. Until now perhaps.
What might Catlin's comments mean for business? Could the uber-connected world and the seemingly headlong thrust towards the Internet of Things have some nasty side-effects that we are only just becoming apparent? For example, if companies cannot secure adequate insurance cover (either outright or at a reasonable cost), might they be faced with the challenge of reviewing their business models? Progress rarely occurs without consequences. Perhaps some of the so-called old ways that many have rushed to consign to history—like walking into a store and buying groceries and other goods in person—might not be so bad after all. Is your board prepared to wrestle with this issue, or will it simply walk away?
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.