What is digital risk and why should you care?

/in /by

Published November 10th, 2023 by Kyle Langan

Connectivity in the world brings digital risks manifested by the use of technology. [1]  Risk takers should consider more than just the implementation of technology. Bruce Carnegie-Brown, Lloyd’s chairman says “the global interconnectedness of cyber means it is too substantial a risk for one sector to face alone and therefore we must continue to share knowledge, expertise and innovative ideas across government, industry and the insurance market to ensure we build society’s resilience against the potential scale of this risk” [2].

What is resilience?

Resilience means having features in place for the preparation, prevention, protection, and response after an accident or disaster [3]. For example, the U.S. relies on the National Security Council to instill ideas and actions of resilience in their national strategy for a crisis scenario; the U.S. is advanced terms of economy and insurance penetration, meaning there is capital in the U.S. to fund response and recovery to a disaster. [4] Conversely, a society with low income, that lacks public bodies and infrastructure, will struggle to achieve crisis management and damage limitation. [5] In a highly resilient society, the shocks of disasters are less severe, there are more preventive measures in place, and all key functions are up and running again after a short time [6].

Data, within organizations reporting a lack of resilience:

“44% are at the point of assessing digital risk with quantitative and/or qualitative metrics

19% are still defining digital risk

12% do not manage digital risk.” [7]

Preparation, prevention, protection, and response are important for creating a high level of resilience. For digital risk, it seems more preparation is needed.

Please reach out to Conrey’s risk manager, Kyle Langan (kylel@conreyins.com) to help proactively strategize on the components of resilience before you experience a loss.

Source: https://www.auditboard.com/resources/ebook/digital-risk-report-2023/

 

References

[1, 7-8] Wheeler, J. (n.d.). Digital Risk Report 2023. AuditBoard. https://www.auditboard.com/resources/ebook/digital-risk-report-2023/

[2] Lloyd’s Systemic Risk Scenario reveals global economy exposed to $3.5trn from major cyber attack. Homepage – Lloyd’s. (2023, October 18). https://www.lloyds.com/about-lloyds/media-centre/press-releases/lloyds-systemic-risk-scenario-reveals-global-economy-exposed-to-3.5trn-from-major-cyber-attack

[3-6] Resilience – More than just a buzzword . MunichRe TOPICS GEO 2016 . (2016). https://www.munichre.com/en/insights.html