Daily Market Update - July 10, 2014

​Cyber risk continues to dominate concerns among businesses, but report says insurance business is “in its infancy” in dealing with it… Climate change and the global risk in “not doing anything”… Health insurance sales are up thanks to Fed money… And Canadian insurers count the cost of the Angus tornado…

Risk Management News


Further evidence of the scale of cyber risk
The results of a cyber security study has revealed today that nearly two-thirds (64%) of IT decision-makers said they expect their organisation to be the target of a cyber attack within the next 12 months. And nearly one in three (32%) of those surveyed confirm their business was hit by a cyber attack during the past year. There is particular concern for the retail sector as for those using point-of-sale systems to process credit card payments, 70% admitted they had no way of knowing if their systems had been targeted. Other findings of the UK survey, include the vulnerability of computers that are running older operating systems that are no longer supported (Windows XP for example). Loss of business, compromise of data, reputation damage and financial impact were the highest concerns. Asked where the cyber attacks were most likely to come from, criminals were top, followed by so called ‘hacktivists’ and disgruntled employees. Meanwhile a second report today, issued by Atlanta company Crawford & Co sets out the risk of cyber attack and notes that the insurance industry is “in its infancy” in dealing with the issue.

Environment law expert sets out risk to business
The head of law firm Baker & McKenzie’s Global Environmental Markets practice has contributed to a new report from the Committee for the Economic Development of Australia. Martijn Wilder, who’s involved with many Australian environmental organisations, is one of the key authors of the report as an expert on global public policy on the environment. As well as making a compelling case for business to continue to keep climate change at the forefront of thinking, Mr Wilder points out the complex and growing legislation surrounding environmental issues. For multinational businesses in particular, keeping on top of both global regulations and the laws relating to individual regions or jurisdictions is no easy job. He highlights that not being compliant with environmental regulations and not being fully aware of climate change risks could be hugely damaging for business.

Health insurance growing thanks to Fed money
The sale of health insurance in the US is growing thanks to government subsidies making the policies more affordable than ever. A recent government reports shows that 87 per cent of new health insurance policies this year were bought with government subsidies. For most of these policies monthly premiums are less than $100. There has also been an admission that verifying applications for subsidies is often problematic, with discrepancies between information on applications and that held by government meaning health insurance exchanges being unable to solve the issues in 89 per cent of cases. Writing in The Tennessean, health law expert Richard Cowart points out that with the government now buying so much health insurance, taxpayers as well as purchasers have an interest in how well the system is working.

Canadian tornado causes $30 million of damage
Insurance Bureau of Canada reports that according to Property Claim Services the estimated insured damage caused by the tornado that struck Angus, Ontario, last month amounts to at least $30 million. Many insurance companies brought in extra staff to start issuing cheques to around 100 residents to cover their daily needs and to begin processing claims immediately. The amount of insured damages reported is a preliminary estimate by Property Claim Services (PCS), which tracks insured losses arising from catastrophic events in Canada.

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