Daily Market Update - July 22, 2014

IT teams struggle to balance security measures with required performance… The Internet of Things provides new opportunity for insurers… Solar panels increase risk to property… And young people vote for risk management strategy...

Risk Management News


IT teams face resistance from colleagues on security measures
With businesses becoming more aware of the need to protect against cyber threats, IT teams are charged with ensuring that security measures are robust, but this doesn’t always make them popular with colleagues. A focus group during Computing magazine’s Enterprise Security and Risk Management Summit found that the issue is that security procedures and software frequently slows down network traffic and applications, causing frustration for users. In some cases, IT teams are required to switch off certain security measures to enhance performance. This is creating a fine balancing act in workplaces; IT teams trying to increase security and lessen cyber risks, while colleagues including management not wanting poorer performance. The solution will likely be a careful assessment of security procedures to ensure that they are strong enough while having limited effect on performance, but also a greater understanding among management and non-IT staff of why security is of paramount importance.

The Internet of things prompts new thinking in insurance
The connected world of technology joining a whole range of household and business appliances on a network is growing fast. The so called ‘Internet of Things’ (IoT) is predicted to increase by a factor of 30 by 2020 with millions of devices having their own IP address allowing them to be controlled, and crucially for insurers, allowing them to provide real-time data. Experts say that the IoT will allow insurers (and businesses themselves) to be proactive, to assess and manage risk. “There is a lot of speculation the future will include sensors that will tell life insurance companies how healthy people are,” says Alex Plenty, Executive Partner at IBM Global. “That could either be used to change premiums, or life insurers will become more benevolent in terms of offering a lifestyle improvement product.” Read the full story.

Zurich advises on risk of solar panels
Insurance giant Zurich has issued advice to companies who are making a commitment to going green by installing solar panels. The use of photovoltaic (PV) systems has tripled in the last three years, but businesses are not always aware of the risk associated with them. Fire-related risks are among the top challenges associated with PV systems. They have more fire ignition sources and present more opportunity for fires to occur beyond the reach of standard fire protection and fire detection systems. Also, when a building fire requires firefighting activities, firefighters typically turn off all sources of electric power to the building. However, when PV systems are involved, a complete shutdown of electric power may not be possible since the PV panels continue to generate current from either daytime sunlight or even night time fire service lighting. Risk managers also need to be aware of unexpected structural loads such as snow or ice that accumulate in shaded areas below panels. When PV panel systems are installed on low slope – or flat – roofs, snow accumulations on panels will melt which can refreeze and may develop into unexpected ice accumulation, and over time might even result in building collapse. Such are the potential risks with PV panels that Zurich’s report recommends: ‘commercial building managers and risk managers try to avoid the installation or integration of photovoltaic systems onto or into buildings until the challenges and risks associated with this system are fully understood and addressed’

Student leads the way on climate change risk
A student from New Zealand has shown the kind of thinking that is needed when it comes to climate change risk. Henrietta McNeill has been at the Y20 Youth Summit, made up of delegates from the G20 and guest nations. Natalie fought hard to get her resolution included in the summit’s communiqué: “The resolution focussed on disaster risk management much of which I learned from living in Christchurch and successfully studying at the University of Canterbury during and after the 2010 and 2011 earthquakes. The other part of the resolution focussed on climate change displacement and refugees, particularly for small island developing states.” She will now be hoping to persuade the NZ Prime Minister to take a document she is preparing to the G20 Summit in November. Read the full story.

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