Firms debate IT catastrophe bond

Major companies are investigating ways to insure themselves against catastrophic cyber attacks, according to digital risk...

Major companies are investigating ways to insure themselves against catastrophic cyber attacks, according to digital risk assessment company Mi2g.

Mi2g claimed that large companies faced a $100bn (£52bn) "global cyber catastrophe" and were considering banding together for financial cover.

Most insurance policies will not cover firms for losses from hacking or denial-of-service attacks, said the company.

DK Matai, the firm’s executive chairman, said that 10 to 15 chief executive officers of FTSE 100 and S&P 500 companies from the UK, US and Switzerland were looking for cover in anticipation of a massive digital disaster.

One of Mi2g’s missions was to get government to listen and to educate home users who do not employ up-to-date anti-virus software.

He suggests that governments issue computer "driving licences" to home computer users, or encourage high-street computer suppliers to limit the capabilities of PCs - so that they cannot send out hundreds of messages a minute.

To avoid catastrophe, Mi2g advised organisations not to rely on just one operating system.

"A computer network based 99% on one operating system may not necessarily be the most robust if a future distributed intelligent malware agent targets the vulnerabilities of software running on that platform in particular," Mi2g said.

"There could be quality awards issued for achieving a high standard of biodiversity by the government agencies responsible for trade and industry."

Corporations are looking at the idea of banding together to create an alternative risk transfer such as a catastrophe bond. These had been created by consortia in certain industries for the past 10 years to cover them for hurricanes and tornadoes.

Chief executive officers are now talking to each other about such a bond to cover massive cyber attacks.

Madeleine Acey writes for Techworld.com

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