A leading figure in the field of cyber insurance has warned brokers about an emerging area of risk, saying exposure is set to explode within the next few years.
“What we’re going to see in the next three to five years is the mainstreaming of Internet of Things (IoT) devices,” said Gerry Power, national head of cyber sales for Emergence Insurance. “That’s going to create a whole new area of exposure and that’s going to be something that brokers, businesses, and insurers all need to adapt to as the world around us changes.”
While reports vary on exactly how widespread IoT devices will become in the near future, they do all point to a dramatic uptake in numbers in the coming years.
One study by telecommunications giant Ericsson projected that there will be around 29 billion connected devices by 2022, of which 18 billion will be related to IoT.
The same research also claimed that, this year, the number of IoT devices would surpass the number of mobile phones for the first time.
“These days, we are operating in what I call a ‘plug-and-play’ environment where you just buy a device, plug it in and it works – but the trouble is security,” said Power.
“These products have all got settings that can be adjusted but if a customer or business uses them without changing the default username and password then all a criminal has to do is run an algorithm to find any devices in the area which are still operating on the default settings,” he explained.
“It just means if people aren’t risk-aware and thinking about these sorts of things, then they’re exposing their whole network because a criminal just needs to gain one access point to a system and once they’re in, they just navigate their way through to get to the crown jewels of an organisation which could be anything from intellectual property to a database of clients.”
Power also stresses, with the rapid expansion of IoT devices, brokers play an integral role in educating their clients on the risks they face.
“The insurance broker is the trusted advisor to businesses and it’s their role to make sure clients are aware of their exposure,” he said.
Written by Nicola Middlemiss