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The management of shareholder value maybe the approach which will influence the management of cyber risk going forward. With market and regulatory attention on cyber security, will market forces create the change needed.
Credit rating agencies are focusing on the effects of cyber on credit scoring. With the ultimate sanction being a hit on the cost of credit and market perception. The insurance industry is starting to review its policies, with regulators raising concerns about the over exposure of cyber to the sector. The differential between underwriting income vs. payouts is widening and the frequency and severity of cyber attacks is increasing.
The failure of companies to address the ‘cyber risk gap’, the difference between the exposure to cyber and their efforts to manage the risk is fueling the insurance market and credit rating agencies response. Nearly ever breach which reaches the media portrays a similar story, hackers inside a company for an inappropriate amount of time, a data breach or IP wiped; highlighting a lack of detection and protection capabilities. Resulting in a rapid and now regulatory response to the markets.
Are we heading to a market driven correction. Will market forces and shareholder value drive the cyber risk management agenda.
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