Tag Archives : cybersecurity

Exclusive FERMA ECIIA Cyber Risk Governance report available

Click above to read the report!

Joint FERMA/ ECIIA Conference
At the junction of corporate governance and cyber security
29 June 2017 from 16:15 to 18:45
European Parliament, Room JAN 6Q1, Brussels

Kindly hosted by MEP Antanas GUOGA

Conference report

A joint working group, representing risk managers and internal auditors from 8 EU countries and  6 different economic sectors (bank, transport, defense, IT, food services and telecom) has developed recommendations for organizations on innovative ways to internally organize the management of cyber risks.

These recommendations include a cyber risk governance model between the key internal stakeholders and the Risk and Audit Committees.

The proposed model will increase cyber-resilience, define the key stakeholders and the conditions for success. Developing cyber governance principles for greater resilience is supported by the World Economic Forum, which published a report in January 2017: « Advancing Cyber Resilience: Principles and Tools for Boards ».


Click above to read the agenda and biographies of the speakers





The aim of the conference is to present and discuss the proposed report and respond to the following fundamental question: is there a governance model that would support the resilience of the European economy in terms of effective and efficient risk management and compliance?

Although companies must remain free to organize the way they manage risk, aware that there is no « one size fits all » solution, whatever the approach taken, it is essential to embed cyber security throughout the organization from the top to the operational level.

Corporate Governance and Cybersecurity Event at European Parliament 29 June 2017

Media Contacts

Lee Coppack

FERMA media coordinator, +44 (0) 7843 089904 and +44 (0) 208 318 0330, lee@coppack.co.uk

Typhaine Beaupérin

CEO FERMA, +32 (2) 761 94 31, typhaine.beauperin@ferma.eu


EU cyber conference: measuring Digital risk management in an industrial group


Click above to read the intervention

On 14 December 2016, Philippe Cotelle, Head of Insurance Risk Management AIRBUS DEFENCE & SPACE and vice-President of the Cyber Commission of AMRAE the French Risk Management Association, delivered the following intervention at an official event of the Slovak Presidency of the Council of the EU on cyber issues.

On behalf of FERMA, he provided insights on the risk manager role in digital risk management and key recommendations for future EU researches on cyber security.pc1-14-12-2016











More information on the event available at: http://www.eu2016.sk/en/political-and-expert-meetings/conference-on-cyber-issues




Expert Views: Cyber risks, the SPICE Initiative at Airbus

Philippe Cotelle, Head of Insurance Risk Management at Airbus Defence and Space, member of AMRAE

Philippe Cotelle, Head of Insurance Risk Management at Airbus Defence and Space, member of AMRAE

Philippe Cotelle, Head of Insurance Risk Management at Airbus Defence and Space, describes the development of a response methodology to create resilience against cyber risks.

There are three main obstacles to a good understanding of cyber risks in our organisations, which I believe are common to most businesses:

1/ It has long been perceived as an IT issue only, which neglects addressing the related business impact. This is especially critical with the increase in connectivity of industrial systems.

2/ Confidentiality is a major element preventing a clear and open analysis of this risk as information management is a critical security issue; even creating a list of potential vulnerabilities is a huge concern.

3/ Finally there is a fear that disclosing a cyberattack suffered or even admitting a potential vulnerability could endanger the reputation of the company.

To get over these obstacles, the risk manager has to be able to demonstrate to the CEO or the executive committee the possible financial impact of a massive cyber attack in terms of business interruption and loss of business opportunity. For this, the risk manager needs data to show the organisation’s current state of cyber resilience, past and future cyber protection investments, and mitigation of the risk.

We must also be able to explain the legal and regulatory implications of dealing with data breaches, especially under US laws, and the protection of critical infrastructures under French and EU laws.
The risk manager needs a cyber risk map of the information system of the organisation showing the most sensitive assets to be protected. Finally he or she will use this information to engage with the insurance market.

We found that no convincing method had already been developed for doing this; we had to elaborate one. SPICE stands for scenario planning to identify cyber exposure, and it is an initiative sponsored by the CFO of Airbus Defense and Space, initiated by me as the Head of Insurance Risk management. It is a pilot programme for a business impact analysis to identify cyber-related disaster scenarios that could affect our operational capability and it is truly innovative.

No convincing method available
SPICE needs high level technical experts who know the cyber threat environment of the organisation. To start, we gathered representatives of all the functions as well as from IT and information management security to:
• Educate the operational managers to the new cyber threats;
• Discuss the security issues with great care;
• Openly consider some potential cyber attack scenarios – and not assume it could not happen to us;
• Support ‘impacted’ functions and information management security on quantification.

Building the scenario

Attacks: We focussed on identifying potentially catastrophic scenarios:
• Who might attack us and what would their motives be?
• What functions and assets would be impacted?
• How would we recover and how long would it take?

Cost: We calculated the business and operational impact with inputs from operations. We split the scenarios into four phases from security breach to recovery, including investment in remediation, to estimate the possible costs at each phase. What did we learn from this?
• The numbers relate to our financial exposure – but there is no final number.
• Management has to play a part.
• The objective is to reach a consensus that is acceptable to everyone and valid for our analysis.

Probability: Local information management security then evaluated the technical probability of the success of an occurrence at each step of the process. For this we used the Cyber Kill Chain developed by Lockhead Martin, which plots the stages of an attack from preparation, instruction and active breach against the time involved.

Lessons: This same method applied by experts at two different sites produced two different probability numbers. We learned that we need a homogenous approach, but that it also has to be associated with different types of attackers, from malicious individuals, to organised criminals or foreign government agencies. We have to ask – why would they undertake the specific attack which is the subject of our scenario?

Mitigation: SPICE helps us develop our mitigation security plan and link it to business needs. We measured the costs of implementing further IT security measures to reduce the probability of occurrence and as a consequence the resulting exposure. After making this IT investment, it makes economic sense to evaluate how to mitigate the residual exposure through insurance. We have the basis for a dialogue with the insurance market to complement this mitigation strategy with an insurance programme tailored to our needs.


• We believe this methodology is key in obtaining valuable insight into our cyber risk exposures.
• This process needs to be performed regularly and as exhaustively as possible.
• We have to be able to roll out the process across the whole company, its products and its locations.
• We must be able to work with operations.
• SPICE provides elements for the risk manager to enlarge the current scope of ERM to encompass cyber risks.

When it comes to cyber risks, many challenges remain in front of us. There is simply no one response. At the same time, there is no alternative to the development of the digital economy, and industry has to adapt thanks to the new possibilities offered by technology to improve efficiency, reliability and profitability. This opportunity, however, generates in itself new risks which have to be addressed and for which a dedicated risk management policy has to be defined. We need a collective effort coordinated between industry, the insurance market and the public authorities. It is time to move from awareness to action.

Philippe Cotelle, Head of Insurance Risk Management at Airbus Defence and Space is a member of AMRAE and has been supporting FERMA in the development of its response to the European Commission’s consultation on cyber risk. He is also working with François Beaume, President of AMRAE’s commission on information systems.

“Battling a Common Enemy” – conference at the European Parliament on how to tackle cyber threats

The following speech was delivered at a conference on cyber risks at the European Parliament on 23 February 2016.

Jo Willaert

Jo Willaert, FERMA President

“Honorable Members of the European Parliament, representatives of the European Commission, ladies and gentlemen,

As President of the European Federation of risk management associations, and myself as Risk Manager for Agfa-Gevaert for 15 years, it is my privilege today to be a guest in the European Parliament, the heart of the European Union.

I want to thank Mark Weil, CEO Marsh UK and Ireland, for inviting me to speak at this conference.

Earlier this month, a Los Angeles Hospital, the Hollywood Presbyterian Medical Center was a victim of a cyberattack called a ransomware. On 5 February, hackers took over the medical records and shut down the hospital’s computer servers for more than10 days.

Even patients had to move to other hospitals because key software was locked.

I understood that last Wednesday, the hospital announced they finally paid the hackers to regain control of its computers.

Hospitals and all businesses are going to have to invest in cybersecurity and it’s not cheap.

You might know that the risk manager function in the financial sector is already well defined. In the “real economy”, however, it isn’t the case. Companies are free to decide whether or not  they want to hire a risk manager.

Today, I would like to draw your attention on three key elements for FERMA when we speak about cyber security:

  • First, I’ll express our concern regarding the new systemic nature of cyber risks. The possibility that cyber-attacks at a company level could trigger severe instability or collapse an entire industry or economy.
  • Second, I will outline how businesses, governments and insurers should collaborate to protect our critical infrastructures. Increasing the resilience of our industries should be our common objective
  • Third, I’ll try to convince you that we need a new corporate governance to respond to cyber threats in which the risk manager has a central role.


1. Cyber risk is today a risk that every company is faced with.

Let’s be clear; the inter-connectivity between machines in the supply chain and cloud computing is a source of systemic risk.

This is similar to what we faced in 2008 when the banking sector almost collapsed because of the size of institutions that were “too big to fail”.

The failure (provoked or not) of one major digital provider could today put a stop to thousands of organizations or at least disturb seriously their activities.

For example, the healthcare and the financial sectors deal with very sensitive data. Data of thousands of organisations are more and more stored outside the company in the cloud. They are hosted by a handful of digital providers like Amazon, Microsoft, IBM and Google. This is already a reason to worry about a systemic risk.

It’s a challenge for companies to assess these risks because it raises issues of confidentiality and reputation. This is preventing a clear and open analysis of cyber risks.

Disclosing a cyber-attack or admitting a potential vulnerability endangers the reputation of a company towards its stakeholders.

As a response, the EU legislator has taken action with the adoption of the NIS Directive for critical infrastructures and the Data Protection Regulation for personal data.

These laws will require organizations to prepare themselves for the notification of incidents and data breaches to their local supervisors.

FERMA welcomes this legislation. But it must be recognized that the increased use of personal data will generate more claims for the emerging cyber insurance industry.

We can already anticipate that the European laws for cybersecurity will:

  1. increase the demand for cyber security solutions.
  2. will become obviously a matter of compliance and a condition for doing business
  3. and will finally have an impact on claims. Although it is still unclear, probably too soon, to see how insurers will price and deal with these threats.

2. Considering what has been said, a major incident, that would disrupt European industries, would require collaboration between governments, companies and insurers to protect critical infrastructures and increase resilience.

In case of catastrophic cyber losses, it will not be possible for the private sector to indemnify alone the liabilities that could arise from a critical infrastructure.

In our response to the Commission consultation on cyber security, FERMA has listed catastrophic cyber losses as one of the 3 main cyber security challenges by 2020.

FERMA recommends setting up a structured dialogue between the private and public sector.

We need comprehensive solutions inspired by certain types of insurance pools or state guarantees, as is already the case to cover terrorism or nuclear risks.

3. The management of cyber risk is too often seen as being the responsibility of the IT-department only. However, the exposure to cyber threats has a potential business impact on the company as a whole.

Cyber risk is not only an IT risk; it’s an enterprise risk.

In that respect, we advocate a central role for the risk management function as regards cyber security in the company.

The risk manager should be the risk expert to support board and the CEO. He or she should work hand in hand with the operational units (IT, Legal, Internal audit, others…) without being an IT specialist.

An integrated cyber security and breach response team is crucial to protecting the organization as a whole.

When thinking about cyber protection, management will logically refer to the IT department in the first place, and if occasion arises Legal will be involved as well. In this case, it will most of the time lead to reinforcement of back-ups and emergency procedures.

However in the companies, where risk management is part of the decision-making process, it will naturally lead to global solutions. Stand-alone insurance coverage for cyber security will be one of them.

This has been illustrated by FERMA’s last European Risk & Insurance Report. It showed that 72% of the risk managers are not enough involved in IT related issues. As a result, there is no adequate stand-alone cyber coverage for their company. Later this year, with the next edition, we will see whether this figure has reduced or not.

It is also important to stress that insurers are, in most cases, not in a position to develop adapted insurance solutions. They are usually only in contact with the risk manager, directly or through the intermediary of the broker. The risk manager does not always have the tools to overview the consequences of cyber risk on the whole company. Mostly, he cannot but rely on specialists separately, e. g. IT and Legal. Suppose that:

The ever-increasing and constantly evolving landscape of breach notification laws leads the chief legal officer of company ABZW to ask his colleague risk manager to seek insurance protection.

The systemic nature of the cyber risks of the company, however, has not been tackled. Possible instability, crisis management, communication, reputation, restoration… these are all cyber issues which need comprehensive solutions.

The trigger for a purchase decision is finally the alignment of views between IT, Legal and the Board about the necessity of a cyber cover.

I’m happy to confirm that a lot of initiatives are coming from the insurance market in order to design products which are an answer to the concerns of the industry.

In my personal opinion, cyber risk protection cannot be put in one of the traditional insurance boxes, such as property, professional liability, crime…but should be a specific, stand-alone product, tailored- to the needs of the industry.

As a conclusion today, I would like you to remind these two things:

  • The cyber threats are now of a systemic nature:
    • We need to collectively develop innovative financial solutions to protect not only critical infrastructure but our economy as a whole from a digital 9/11
  • The cyber security laws and all related initiatives should not forget to include a risk governance part:
    • Cyber threats must be understood from the top to the operational level. Here I will again insist on the necessity to give to the risk manager a central place in this cyber risk governance.

Thank you very much for your attention!”

Cyber security is an enterprise risk, FERMA tells the European Commission

Cyber security requires an enterprise-wide approach, and the risk manager’s role is to help the company achieve effective, data-based enterprise risk management, the Federation of European Risk Management Associations (FERMA) has told the European Commission.

Click above to read the FERMA response to the Commission’s consultation on public-private partnerships in cyber security

Click above to read the FERMA response to the Commission’s consultation on public-private partnerships in cyber security

In its response to the Commission’s consultation on public-private partnerships in cyber security concluded last week, FERMA stated: “Businesses have difficulties with reaching a basic level of protection often due to a lack of risk insights and data driven risk mitigation.”

FERMA President Jo Willaert, commented: “The boards of organisations need to understand that cyber risk is not only an IT risk; it is an enterprise risk. In that respect, we advocate a central role for the risk management function. Without being an IT specialist, the risk manager provides expert advice to support the board and the CEO. He or she is working hand in hand with the operational units such as IT, legal and internal audit.”

FERMA stressed that this overview of cyber risks across an organisation, including into the supply chain, is critical especially with the development of the Internet of Things. Using  scenario-based analysis, the risk manager can quantify the overall cyber risk exposure and validate mitigation strategies on an enterprise basis.

FERMA also argues that public intervention is necessary in order to help organisations cope with the challenge of cyber risks. It urges the development of:

  • A framework for the clarification of cross-border liabilities in cyber incidents;
  • A global set of rules for cyber risk assessment that would safeguard confidentiality in incident disclosure and insurance claims;
  • The incorporation of cyber risk governance in legislation and guidance to create an integrated approach to the threats from top to bottom of the organisation.

Jo Willaert said: “Cyber threats are now of a systemic nature. Businesses, governments and insurers, therefore, need to collaborate. We must act now.”

Ms Typhaine Beaupérin, FERMA CEO: typhaine.beauperin@ferma.eu, tel: +32 (2) 761 94 31
Lee Coppack, press contact: lee@coppack.co.uk, tel: +44 208 318 0330/ +44 7843 089904
All FERMA press releases can be found here.

Risk Conversation at Board level: 3rd webinar with ecoDa and AIG

Banner 24 March 2016 v2
3rd joint webinar with ecoDa/AIG and FERMA dedicated to cybersecurity in our series “Risk Conversation at Board level”

PART II – Cyber Security: the mitigation strategies – how to identify, assess and mitigate cyber risks.

24 March 2016 from 10:30 – 12:00

Click on the image to read the speaker' bios

Click on the image to read the speaker’ bios

What level of awareness should Boards have? How much time should Boards spend on cyber/risk management issues?

The Risk Manager must be responsible, as for others risks, for the quantification aspect of cyber security. It is a necessary step towards understanding and managing the exposure of the company. He/she should act as a facilitator between the Board and the operational department (IT, Finance, Legal and other functions).

  • How can Risk Managers bring unique added value in identifying and quantifying risk exposure?
  • When an interrelationship exists between the Risk Manager and the CIO (Chief Information Officer) or their equivalent, is it complementary and symbiotic?
  • To whom should the Risk Managers report the exposures, the liabilities, and the potential correlations or interconnections with other risks?
  • How would they propose relevant mitigation strategies to be endorsed by the operational departments and the Board?

In case of a claim, how should the confidentiality of critical information be managed when it is provided to multiple stakeholders (insurers, brokers, loss adjusters, public authorities)? Are the companies ready to grant access to their confidential systems and processes to those third parties?

This is a key subject to unlock the cyber insurance development and to support the economic growth the Digital world is bringing to Europe.

Risk Conversation at Board level: 2nd webinar with ecoDa and AIG

The second webinar dedicated to data protection and cybersecurity in our series “Risk Conversation at Board level”

PART I – How to adapt the risk governance to the changing regulatory landscape for personal data ?

23 February 2016 from 10:30 – 12:00


Speaker Biographies

Speaker Biographies

The two parts of the webinars are:

Webinar PART I Data Protection – how to adapt the risk governance to the changing regulatory landscape for personal data (Data Protection Officer, breach notifications, sanctions, hosting, transfer and treatment of personal data)?

Webinar PART II Cyber security – managing the consequences. How to identify, assess and mitigate the cyber risks? What should be the level of awareness of the Board? The Insurance part: the US example led by the existing regulations (mandatory breach and IT incident notification…)

The good management of data is now an essential part of the business model of many organisations. But with new dependencies linked to the increased use of external hosting, collection, treatment and transfer of data, it is also posing heavy challenges legal, IT and strategic issues.

If it is no longer a pure IT or legal issues; who is required to take the strategic decisions to allocate the right resources (staff and budget)? What role for the Board?

Should data protection be higher on the Board agenda?

How the Board members should get the right information on the specific data risks of their organisation to be in a deciding position?

Who will be the interface between the practical concerns and the need for strategic decisions?
Is there a role for the risk manager as the instrument to collect, consolidate and analyse the relevant information related to the data protection and the cybersecurity of the organization?

Cyber insurance market: incentives and improved cybersecurity for organisations

French and British initiatives are taking the role of insurance for cyber risks into account in their national strategy for cybersecurity.

In June 2014, the UK Government launched a joint initiative with some major British insurers to increase the level of IT security in UK companies. Called the Cyber Essentials scheme, it is based on certificates and will ensure that certified organisations have a certain amount of security measures in place. Cyber Essentials has been developed in close consultation with the insurance industry and is backed by AIG, Marsh, Swiss Re, the British Insurance Brokers’ Association (BIBA) and the International Underwriting Association (IUA). Continue reading

Future Data Protection Regulation for holding private data?

The EU regulator is at the final stages to adopt the Data Protection Regulation which will set up new rules for operators on how private data must be managed.

In March 2014, the European Parliament strengthened several requirements such as making the applicable fines for breaching rules up to €100 million or 5% of annual worldwide turnover (whichever is greater) when the original proposal of the European Commission suggested fines “only” up to €1 million or 2% of annual worldwide turnover. Continue reading