Cyber and Reputation Risks Remain Top Concerns: Marsh and DRII Survey
October 06 2015 - 9:00AM
Business Wire
CEOs Overestimate Coverage for Most Likely and
High-Impact Risks
- The most likely and high-impact risks
relate to cyber and reputation
- CEOs believe that their organization’s
insurance for the most likely and impactful risks covers more than
it actually does
According to the 2015 International Business Resiliency Survey,
conducted by Marsh, a global leader in insurance broking and risk
management, and Disaster Recovery Institute International (DRII),
firms consider cyber and IT-related risks to be the most likely to
occur and have the greatest potential impact on their
operations.
Marsh, in collaboration with DRII, surveyed nearly 200 C-suite
executives, risk professionals, and business continuity managers
from large and medium-sized corporations internationally about
their organizations’ attitudes toward business risks and the risk
mitigation processes they have in place. The survey results
indicate that organizations are better positioned to address
traditional risks than non-traditional risks and that risk managers
and CEOs have different perceptions about the severity and control
measures in place for various risks facing their organizations.
Among 10 suggested risk scenarios, the top risks in terms of
impact and likelihood are: reputational damage from a sensitive
data breach (impact 79% - likelihood 79%); the failure in a main IT
data center (59% - 77%); and online services being unavailable due
to a cyber attack (58% - 77%). The risks with the lowest potential
impact originate from a product recall event (15% - 21%).
According to the survey, CEOs overestimate their levels of
protection for the most likely and high-impact risks: 28% stated
they have dedicated insurance coverage against cyber attacks and
21% stated they have dedicated insurance protection for reputation
damage after a data breach. However, only 6% of risk managers
stated that they have dedicated coverage for these risks.
“Product innovations in speciality insurance such as cyber make
this a good time for organizations to revisit their coverage to
make sure that it is properly nuanced to meet the unique needs of
their industry and the corporation’s business goals,” said David
Batchelor, president of Marsh’s International Division.
“Additionally, having a well thought out crisis management plan is
a critical element in protecting an organization’s reputation.”
Three out of four respondents considered the failure of IT
systems as one of two areas that could have the greatest impact on
their organization’s reputation, along with the lack of crisis
management planning, the survey found. Both CEOs and risk managers
identified IT system failure prevention (29%) as the most important
area to invest in, with CEOs also highlighting intellectual
property protection (25%).
In terms of preparedness, the majority of organizations believe
they are better positioned to deal with traditional than
non-traditional risks: Respondents rated the level of resilience of
their organizations to be high for natural catastrophes and IT
system failure (40% and 44% respectively), and low for political
violence and an activist group attack on social media (both
32%).
About Marsh
Marsh is a global leader in insurance broking and risk
management. Marsh helps clients succeed by defining, designing, and
delivering innovative industry-specific solutions that help them
effectively manage risk. Marsh’s approximately 27,000 colleagues
work together to serve clients in more than 130 countries. Marsh is
a wholly owned subsidiary of Marsh & McLennan Companies
(NYSE:MMC), a global professional services firm offering clients
advice and solutions in the areas of risk, strategy, and people.
With 57,000 colleagues worldwide and annual revenue exceeding US$13
billion, Marsh & McLennan Companies is also the parent company
of Guy Carpenter, a leader in providing risk and reinsurance
intermediary services; Mercer, a leader in talent, health,
retirement, and investment consulting; and Oliver Wyman, a leader
in management consulting. Follow Marsh on Twitter @MarshGlobal, or
on LinkedIn, Facebook and YouTube.
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MarshEileen Mercer, +44 (0)7990 802
830eileen.mercer@marsh.com
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