How Obama Framework Aids Cyber-InsurersMarketplaces Benefiting from Cyberthreats
The impact of the cyberthreat is having an influence on very diverse industries. Two such sectors: insurance providers and arms makers.
Homeland Security's Bruce McConnell sees the Obama's administration cybersecurity framework [see Cybersecurity Framework: Beyond Standards] to establish guidance to protect the nation's critical infrastructure as helping grow the relatively nascent cyber-insurance marketplace in the United States. Here's what McConnell said during a panel discussion last week at the Center for Strategic and International Studies:
Actions of governments and industry in response to cyberthreats will have widespread impact on individual organization's finances and the economy as a whole.
"Maybe the insurance market is starting to become more vigorous because the two primary things that are missing to make that really roll: one is underwriting standards ... frameworks for firms to underwrite risk and second is actuarial data," says McConnell, senior counselor for cybersecurity at the U.S. Department of Homeland Security.
"The [cybersecurity] framework, we believe, will create one version of an underwriting ability that the insurance industry can use to underwrite policies," he says. "The question of where the actuarial data will come form is still an issue, so we need to figure out how to get that data reported and whatnot in terms of incidents and damages, but it is a step in that direction."
The Stockholm International Peace Research Institute researches conflict, armaments, arms control and disarmament and has tracked for years the world's largest arms-producing companies. According to its analysis, the top 100 providers of arms and military services experienced a 5 percent drop in sales from 2010 to 2011, the latest years numbers are available.
But the institute says we shouldn't be too concerned about many of the arms merchants; they're making up those decline in sales through the marketing of cybersecurity products and services.
"The expansion of arms producing companies into the cybersecurity market - a clear trend in the first tier of the SIPRI Top 100 - is due the growing political and budgetary importance of cybersecurity as a national security issue," says in a statement.
"Companies such as Raytheon, BAE System and EADS Cassidian are seeking alternative revenue channels from the civilian sector while maintaining ties to military spending in this market," the institute says. "These companies' cybersecurity activities are focused on data and network protection software and services; testing and simulation services; training and consulting services; and operational support."
What's evident here is that the actions of governments and industry in response to cyberthreats will have widespread impact on individual organization's finances and the economy as a whole. The arms and insurance industries are merely early benefactors of this trend.