Cybersecurity

DHS banks on data repository for cyber insurance

Shutterstock image (by deepadesigns): protection concept, shield icon.

The Department of Homeland Security got interested in encouraging a cybersecurity insurance market about four years ago after officials realized that "regulating our way out of cyber risk was probably not going to happen," said Tom Finan, a senior cybersecurity strategist and counsel at DHS.

In the four years since, they have been establishing a common breach nomenclature for insurers and IT security professionals, and Finan said he believes they are on to something with the cyber incident data repository DHS is exploring.

The idea behind the repository is to help insurers build more sophisticated products by giving them access to a richer harvest of threat data. DHS is particularly interested in the insurance market's ability to cover property damages and bodily harm that might result from cyberattacks, Finan said Oct. 26 during a panel discussion hosted by New America and Just Security in New York City.

For now, the data repository is just a concept, and the cyber insurance market is challenged by a lack of actuarial data and common metrics, Finan added. A DHS-backed group that is exploring the idea of a repository released a white paper last month outlining 16 categories of data that could form the basis of the repository. The categories include incident detection techniques and mitigation measures.

Another challenge is the differing expectations insurers and lawyers often have for the level of disclosure after a data breach. Companies hit by large breaches have not always been transparent with insurers, said Greg Vernaci, a senior vice president at insurance giant AIG.

Harvey Rishikof, a national security lawyer at Crowell and Moring, countered that attorney/client privilege is an important refuge for firms that expect litigation to result from a breach.

Meanwhile, the demand for cyber insurance is growing. The global market for annual premiums is poised to triple from about $2.5 billion this year to $7.5 billion by the end of 2020, consulting firm PwC said in a recent report.

More analysis is needed to determine what measures are effective in mitigating cyber risk, Finan said. The sense of what works is still anecdotal, and "there's really no broad, objective way to assess what's actually making a difference and what isn't," he added.

Nonetheless, Finan sees progress in having IT professionals and insurers talk it out. "Even four years ago, when we were having our first workshops, the [chief information security officers] were very suspicious of insurance," he said. "They really saw it as a competitor to the limited resources that they had access to [in order] to address the cyber risk of the company."

But large-scale, reputation-damaging hacks like those on Target and Sony Pictures Entertainment are making CISOs realize that risk mitigation and insurance "are two sides of the same coin," Finan said.

About the Author

Sean Lyngaas is an FCW staff writer covering defense, cybersecurity and intelligence issues. Prior to joining FCW, he was a reporter and editor at Smart Grid Today, where he covered everything from cyber vulnerabilities in the U.S. electric grid to the national energy policies of Britain and Mexico. His reporting on a range of global issues has appeared in publications such as The Atlantic, The Economist, The Washington Diplomat and The Washington Post.

Lyngaas is an active member of the National Press Club, where he served as chairman of the Young Members Committee. He earned his M.A. in international affairs from The Fletcher School of Law and Diplomacy at Tufts University, and his B.A. in public policy from Duke University.

Click here for previous articles by Lyngaas, or connect with him on Twitter: @snlyngaas.


Featured

  • Telecommunications
    Stock photo ID: 658810513 By asharkyu

    GSA extends EIS deadline to 2023

    Agencies are getting up to three more years on existing telecom contracts before having to shift to the $50 billion Enterprise Infrastructure Solutions vehicle.

  • Workforce
    Shutterstock image ID: 569172169 By Zenzen

    OMB looks to retrain feds to fill cyber needs

    The federal government is taking steps to fill high-demand, skills-gap positions in tech by retraining employees already working within agencies without a cyber or IT background.

  • Acquisition
    GSA Headquarters (Photo by Rena Schild/Shutterstock)

    GSA to consolidate multiple award schedules

    The General Services Administration plans to consolidate dozens of its buying schedules across product areas including IT and services to reduce duplication.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.