IT security execs think cyber terrorism losses should be shared

About half of IT security executives recently surveyed said losses from a cyber terrorism event should be shared between insurers and the federal government.

A survey sponsored by the Property Casualty Insurers Association of America and conducted by the Ponemon Institute showed 85 percent are concerned about a terrorist attack in the US in the next few years and 48 percent think any losses should be shared.

“In addition to traditional terrorism, cyber terrorism is also a high-level threat to our country’s national security,” said Marguerite Tortorello, PCI’s senior vice president of public affairs. “Our research shows an overwhelming majority of the executives surveyed agreed that a large-scale cyber attack against the country could have catastrophic or significant consequences to their companies’ business operations as well as the national economy. The risk managers and executives also agree that a plan is an essential part of their company’s risk management strategy.”

Thirty-seven percent of respondents said the losses should be absorbed by the insurance industry alone.

The insurance industry has been lobbying for the renewal of the Terrorism Risk Insurance Act, a federal backstop. The current legislation expires at the end of the year. TRIA was enacted in 2002 after reinsurers and insurers began excluding terrorism coverage following 9/11.

“TRIA is a fiscally responsible and effective national security plan that protects our country’s economic resiliency. PCI urges Congress to reaffirm its support for TRIA,” said Tortorello.

According to the survey, 65 percent said they agree it would be best to have a program like TRIA in place.

Survey-takers said the highest level of exposure involves a cyber attack on the power grid, at $255 million.