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Rethinking the Insider Threat While Mining for Data Security Gold
By: Jeremy Wittkop
Many people believe that the vast majority of cyber threats involve the intentional theft of credit card numbers or Personally Identifiable Information (PII). That is not true.
Many people also believe that the most prevalent incidents
involve malicious software and ransomware. That is also not true.
The news cycle drives these perceptions. Stories about
malicious software, and ransomware in particular, are a media favorite. A ransomware
attack is sensational. It features a villainous criminal demanding payment and
a helpless victim pleading for his mercy. Even better for news outlets, this
dramatic story requires little investigation or technical understanding to
report it. But despite the media hype, this form of cybercrime represents less
than 1% of actual attacks.
The truth is that the vast majority of stolen information is
taken by someone who already has credentials. Sometimes people unknowingly share
sensitive information through phishing or social engineering directed by an
outside agent. But at other times, people act maliciously or in their own financial
interests. Case in point is the story of American Semiconductor. An employee stole
sensitive intellectual property and put it on a removable USB device in
exchange for $2 million.
As one of the largest Managed Data Protection practices in
the world, InteliSecure uniquely understands how people interact with sensitive
information. We monitor the behavior of over 2 million users in over 140
countries around the world every day. As a result, we see both intentional and
accidental data exposure, and we have amassed countless stories of how people really steal it. These days much of it
winds up on the Dark Web. Details of these stories cannot be told due to client
confidentiality, but we have built a library of anonymous examples to share,
all of which came from our innovative Golden Nugget Program.
Several years (and countless gray hairs) ago, I led
InteliSecure’s Managed Security Services practice. A proponent of variable
compensation, my CEO at the time decided that we needed to make changes in
Operations. He thought our people needed additional motivation. While incentive
compensation is relatively straightforward for sales and marketing, structuring
it correctly for our Security Operations Center teams was a bit of a challenge.
I told him I’d work on it.
My first step was to research what my peers were doing.
After all, many good ideas were probably already in use. I discovered that majority
of Managed Security Service providers used a variable compensation structure to
incentivize behaviors that led to profitability. For instance, many firms referenced
common call center metrics such as the volume of tickets or how fast, on
average, agents closed them.
I knew these measures did not positively impact the client
experience, and in many cases they had an adverse effect. I’m sure you’ve called
customer service at a cable company at least once in your life. The
representative probably asked your name, located your account, and immediately
started pushing the ticket to a close, regardless of whether your problem was
solved. Measuring employees based on productivity drives this type of behavior.
I wanted to do things differently. Rather than reduce costs,
my goal was to reward the behaviors that helped us better acquire, satisfy, and
keep clients. We had to focus on client value.
One day after skiing amazing powder at Breckenridge with an
InteliSecure executive, a salesperson, and my friends on the Managed Security
Services team, we had an idea. We were having a good time relaxing and watching
a show called “Gold Rush” on the Discovery
Channel. Gold Rush is about gold mining, a very slow, mundane and laborious
process. But thanks to the magic of television, the Discovery Channel made it fascinating.
One of my colleagues remarked, “What we do is like gold
mining. We create security policies to find rare security events, which is
similar to a gold miner picking which plot of dirt to prospect. Obviously if
there’s no gold in the dirt in the first place, you won’t be successful finding
it in the end.”
He continued, “Our triage process is a lot like running dirt
through a sluice box. If it’s done well, the miner maximizes his yield, but if it’s
done poorly, the gold washes into the stream below. When our engineering team sets
up the systems, we’re like the miners building the sluice box. If we don’t do a
good job, the process fails. Our entire team must work together to find Golden
At that very moment, our Golden Nugget program was born. It
was simple. If our team found a valuable security incident for our clients, we
would reward everyone who contributed to that discovery. We also didn’t want to
decide the Nugget’s value in a vacuum. We asked our clients to participate in
the process and rule whether the finding was significant. We continue to
showcase Golden Nuggets today during business reviews with our clients.
When we first started the Golden Nugget program, we simply compensated
people for any material security event they found. But for really big finds, we
gave them extra special recognition. You can read more about one amazing story in
my book, Building a Comprehensive IT
Security Program (https://www.amazon.com/Building-Comprehensive-Security-Program-Guidelines-ebook/dp/B01JRFGQY2),
but in summary, we caught a user stealing a substantial amount of intellectual
property at one of our manufacturing accounts. This proprietary information cost
$30 million to create, and it pertained to a product line expected to deliver
$3 billion in revenue over the next 5 years. The perpetrator intended to leave
the country and illegally mass produce a counterfeit version of the goods. When
the individual went to trial, investigators discovered he had successfully made
away with similar information from our clients’ two top competitors. He is
currently serving 10 years in federal prison.
When our SOC team agent surfaced this gem, we realized that not
all Nuggets are created equal. We needed to recognize the best of all Nuggets
we found. Doing so motivated our Managed Services team to compete even more to
find them. Thanks to the increased volume of great finds, we celebrate the very
best of them during our quarterly awards.
Since the Golden Nugget program’s inception in 2013, we’ve seen
more than our share of valuable Nuggets. In the beginning, broken business
processes accounted for most of them. Later, however, we saw a disturbing rise
in the volume of incidents when users inappropriately shared intellectual property.
Although much of it was accidental, a surprising percentage was intentional.
Why the change? My colleagues fault three factors. First,
many of our clients have matured past their initial compliance requirements and
have started to build policies protecting intellectual property. Second, spurred
on by competition for Golden Nuggets, our analysts have become much better at
finding the proverbial “needle in the haystack.” Third, the lines of acceptable
behavior pertaining to sharing sensitive information has blurred significantly
as the traditional security perimeter has eroded. Since it’s easier to share in
today’s cloud-connected world, people now think it’s OK to share whatever they
I think these are valid explanations, but in my view they
don’t tell the whole story. Here’s what I call the inconvenient truth:
More people than ever are stealing Intellectual
Property and other sensitive data because the market for trafficking stolen
information has matured. Theft has become for many a low-risk, high-reward
Most industry analysts agree
that the success rate for data theft is around 95%. Surprisingly, only one criminal
in twenty gets caught because most organizations do such a poor job of
protecting their data. And of those detected, very few offenders will ever be
prosecuted. They’re simply terminated and then go on to repeat the same
Protecting data is hard, and
most organizations aren’t doing it well. Unfortunately companies place too much
emphasis on perimeter security and not enough on protecting their most
The world has changed. To be
successful, companies today must do more than retrofit their perimeter
technologies—they must implement comprehensive approaches to protect all types
of data, no matter where the intrusion occurs. Right now, it’s much easier for
an insider to pilfer behind the walls than it is for an outsider to penetrate a
firm’s thick perimeter defenses. Until this changes, criminals will continue to
exploit this common vulnerability without fear of getting caught.
That is, unless they happen
to work for an InteliSecure client.
Forget what you may have heard about data protection. Despite
beliefs that DLP will only catch well-meaning insiders and broken business
processes, we can tell you from our many years of experience that there’s
significant risk in not doing DLP well. People who say data protection programs
don’t work are among the 95% who are doing it wrong. Criminals are stealing your data, and technologies
do exist to catch them. It’s time to
make a change.
We can help. Our Golden Nugget program is
just one example of the lengths we go to safeguard our clients’ most sensitive
information. Put our expert teams in our Security Operations Center
to work for you. We can find the nuggets that boost the value of your security
program and deliver the level of protection you deserve.
The Dark Web is an
emerging threat for everyone in IT security, but most people don’t know what it
is. InteliSecure is planning a webinar with Emily Wilson from Terbium Labs, an
expert who does a phenomenal job of explaining how it works. We will update
this post with a webinar link when it’s scheduled, but you can always check the
InteliSecure Bright TALK channel for more information: (https://www.brighttalk.com/channel/17408/intelisecure)
Evaluating a Penetration Testing Company
By: Rob Hughes and Keith Sharp
It can be difficult to know what to look for when searching for a strategic partner to assist you with your security and risk management processes. More specifically, understanding what makes a good penetration testing company can be difficult without a pre-existing familiarity of the industry. In this blog we are going to discuss the key factors that can help identify a good penetration testing company.
A company or organisation can have many reasons for conducting a penetration
There can be many reasons as to why an organisation looks to utilise a
penetration test, however, enabling better security awareness and assurance
through remediating security weaknesses, are key goals all organisations should
be aspiring too.
Unfortunately, as with any industry, there are good and there are not so
good security testing organisations out there selling services. Therefore, InteliSecure
have put together an overview on the main areas that should be considered when
selecting a security testing company as a strategic partner.
The following three commonly raised questions, will be our starting
point for this discussion:
Therefore, in order for an organisation to be able to answer these
questions, InteliSecure have put together a high level overview of what to look
out for and how to engage with the many organisations that are providing
penetration testing services:
Let’s look a bit more closely into a few of these specific areas.
Penetration testing, in its true form, can be performed across many
different technologies and is usually performed across either an external or
internal network infrastructure, which can include physical or virtual servers,
workstations, firewalls, network switches, routers and many IP based devices
Once the scope of the assessment has been defined, you will have to
indicate how you want the assessment to be performed. A penetration test in its
most basic description is the simulation of an attacker attempting to ascertain
and then exploit weaknesses of networked computer systems. The classic
categories of the attacker perspective that can be applied to a pen test are
known as black box, grey box and white box, these are defined in their basic
tests are performed without any knowledge of the tested environment. The objective
of a black box assessment is to assess the level of security as seen by a third
party connected to the internal network or the internet, without any prior
knowledge of the environment.
tests are performed with standard access or with only limited knowledge of
the tested environment. The objective of a grey box assessment is to assess the
level of security as seen by a legitimate user of the customer who has an
account, along with general information about the tested environment.
tests are performed with knowledge of the internal structure/ design/
implementation of the tested environment.
Penetration testing is an offensive methodology aimed at replicating a
typical attacker, which could be scoped to focus on multiple areas of an
organisation, including web applications. Generally, the methodology is better
applied through a black box testing perspective, which is unauthenticated and
with limited knowledge of the system. The concept is enumerate the information
or attempt to bypass / brute force authentication in order to gain an initial foothold.
Typically, a penetration test is completed under a set methodology and
resembles the basic principles of the open source security testing methodology
manual (OSSTMM) and is scoped to include the subnet ranges, devices or IP
addresses, and/or URL’s that are to be included in the assessment.
A myriad of factors can come into play on deciding which attacker
perspective to assume for a penetration test and these ultimately depend on the
complexity, criticality and management of the systems that are going to be targeted
for attack. For example, an organisation may outsource web application
development and have limited access or perspective with respect to the detailed
hosting information or prior penetration testing assurance of the third party, and
so a black box test may be the natural or only choice to assess the solution.
Attacker perspective becomes very important with regards to certain
types of penetration testing, such as red team penetration testing exercises.
Red team penetration tests, by their nature, are almost always performed on
live systems and can include social engineering tactics against company
employees and have less restrictions than other types of security assessment. The
flow of red team penetration tests is typically goal based, in that a
penetration testing team have been given challenges to, for example, gain
access to a specific system, or retrieve a password for a specific type of user
within the network environment, from a specific starting point (and level of
knowledge about the environment that may map to i) a standard employee, ii) an
employee in the IT department etc). Red team exercises must be pre-planned in
agreement with IT security managers to avoid risk and preserve the integrity of
the assessment (i.e. only select employees knowing that attacks are taking
place) so genuine defensive responses can be gauged in their effectiveness
during the assessment (reviewing intrusion/security monitoring alerts) and
thereafter (log analysis etc). Therefore, to facilitate successful red team
exercises, both black box and white box perspectives may have to exist in
parallel to achieve the goals of the testing safely.
Ultimately a good penetration testing company will always guide a client
to the right choices for the environments that are to be tested and should
consider the requirements and constraints of the targeted systems when aligning
the best choice of attacker perspectives with the target(s) involved. Defense
in depth can often be more efficiently scoped and scrutinised by a penetration
testing company depending on what background information they have from the
outset. Attack perspectives can change depending on the information available,
so the above categories are not necessarily rigid and all good penetration
testing companies will recognise and highlight any relevant issues when such
perspectives are not clear or have to change to best facilitate the proposed
The main objective of penetration testing is to essentially ascertain to
what extent the issues and vulnerabilities discovered within a specific
environment can be exploited by an attacker and what systems can be breached
and how (i.e. can certain vulnerabilities be combined and therefore pose additional
or greater risks)
Penetration testing of specific types of network technology can have
their own overarching standards and methodologies, a prime example being network
applications. Focused application testing differs slightly from a true form
penetration test, as this is usually completed using multiple sets of
credentials covering multiple roles (i.e. different levels of trust/access are
assigned to the attacker perspective to align with the potential threats the
application could pose). The principles in focused application testing are
usually aligned to the Open Web Application Security Project (OWASP) and can
cover web applications, mobile applications and thick client or Desktop
applications. This type of testing aligns
with “grey box as a minimum set of information is required to successfully
cover the test cases the application naturally presents.
Most penetration testing companies also offer a compliance and auditing
type of assessment, which can include authenticated build reviews or servers,
workstations, firewall’s and other network security devices, mobile devices etc
etc. This type of testing isn’t essentially penetration testing per say, but
can be used alongside the typical testing in order to gain a more thorough and
comprehensive overview of risk within the environment. When these types of
services are combined in this way, the term “Health Check” is usually used to
describe the process.
Therefore, it is essentially that you fully understand the type of
testing that you require as some compliance requirements, such as the PCI and
the Cyber Essentials scheme in the UK, require a combined “Health Check”
The penetration company will usually ask whether the penetration testing
is required to meet specific compliance requirements, either through an initial
meeting or via a scoping questionnaire, therefore it is essential that you
understand the type of testing you require before engaging with the third party.
This will allow you to gauge if the company can provide the type of testing you
require and the skill set required within its organisation, which leads us onto
the next area.
In addition to evaluating the penetration testing company as a whole,
you should also take a close look at the actual consultants who will perform
the engagement. A good penetration testing company will be able to instantly provide
details of their consultant’s professional backgrounds, along with any relevant
qualifications or professional certification they may hold individually. Penetration
testing, as a specialism, has now become better known in the IT security industry,
with many organisations offering different types of certification to assess an
individual’s competence in the subject. Certifications offer a way to ensure a
baseline level of technical competence and knowledge and understanding of the
profession. However, a consultant who can study a subject and pass an exam, may
not have the expertise or experience to competently complete the penetration
test to your unique requirements. Limitations of experience can exist within a
pen testing company and so it should be expected that availability of
individuals with niche skills may not always exist across the board. However
good penetration testing companies will conduct training or in-house research
to push the skill sets of their consultant’s forward to align with advances in
technologies and/or tools or to allow their consultant’s to be able to upskill
Within a quote or proposal for penetration testing services from the
third-party (which would be derived following the scoping phase), a good
penetration testing company would include information on the consultant’s
likely to be involved in the assessment.
The following areas should be investigated about each consultant,
usually a search on LinkedIn or Google would return valuable results.
Most penetration testing Consultant’s would have graduated from
University with some form of Computer security or science degree, however, this
may not always be the case. Also, there are many Industry certifications that
can be much more focused in penetration testing than a generic degree.
Some of today’s most commonly-recognized certifications include
Certified Ethical Hacker (CEH), Licensed Penetration Tester (LPT), GIAC Exploit
Researcher & Advanced Penetration Tester (GXPN), or Offensive Security
Certified Professional (OSCP). In the UK there are Crest Certifications, Tigerscheme
and Cyber Scheme which are aligned to the UK National Cyber Security Centre (NCSC)
CHECK program, which deals with Government, Police and other potentially
When it comes to continuous education, the SANS Institute is a private
company that also offers high quality information security and cybersecurity
training including penetration testing courses to hone ethical hacking skills,
including web application security assessments, social engineering, red team
operations, wireless penetration testing and more.
Most competent penetration testing consultant’s would have at least one
focused industry standard certification which would be focused on a specific
area of penetration testing, therefore it is important to review the consultant’s
detailed resume to confirm.
Experience within the penetration testing industry can be extremely
broad, with many consultant’s coming into the industry directly from either
University or from another profession. However, it is essential that in a
focused penetration testing role, experience in different areas such as network
infrastructure, application and compliance auditing has been gained by the consultant
throughout their careers.
Most senior level penetration testers in the industry, who are likely to
be the ones who initial scope the penetration test and then lead the
assignment, have at least five years dedicated experience and are certified to
the senior level qualifications.
Specialist consultant’s would also be required to complete testing
across more advanced or lesser known types of security assessment such as red teaming
or mobile application testing.
It is therefore vital to ensure the penetration testing company has consultant’s
with the right skill set available for your assignment, therefore it is
advisable to review any resumes or LinkedIn
profiles for the consultant’s being potentially involved in the project,
to ensure they have the relevant skills and experience.
All good companies document all of their processes and procedures, some
of which are usually available to their clients if requested. Typically, a
penetration testing company should be able to provide the following
This level of documentation should be mature, with policies and
procedures being adhered to within the organisation, therefore, it would be
wise to work with companies that do have their internal policies and procedure
Also, if an organisation utilises sub-contractors or works with
contractors when fulfilling a penetration test, then the procedures for
ensuring standardisation across contractors should also be documented. If a
client handles sensitive information, the data handing and retention policies
may have to align to certain requirements for such data.
Fortunately, most of the established companies working within the
industry are dedicated to providing quality assurance for their services. Some companies
go a step further and are measured in providing penetration testing services to
a set standard, through being aligned to organisations such as CREST (The
Council of Registered Ethical Security Testers) in the UK and globally, which
has effective and comprehensive testing standards and methodologies in place. This
standard could be considered similar to an organisation that has adopted the
ISO27001 standard, but is more closely focused on the type of security services
a company can offer, be it Penetration testing, incident response etc.
In order to achieved company status to the CREST standard, all policies,
methodologies and processes are individually evaluated and have to confirm to a
rigorous standard. These companies must also employ consultants who are
security cleared to at least UK SC level and have been assessed and accredited
to the highest standards of security testing. They can be trusted in order to
ethically replicate the threat actors and provide pragmatic advice and
direction on how to protect yourself against the constantly evolving threat
when selecting a partner to provide penetration testing services, researching
the company is a vital step in ensuring they are competent and experienced to
provide you with the information security assurance you are hoping to achieve.
Cisco® Email Security Appliance (Cisco® ESA) Non-RFC MIME Format Executable Attachment Bypass (CSCvh03786) (CVE-2018-0419)
In October 2017 InteliSecure were performing penetration testing activities for an important client. One of the tasks involved performing tests against the client’s E-Mail content analysis systems. Various types of E-Mail were sent with attached executable files compressed and encrypted in various ways. These were blocked by the content analysis device, Cisco® Email Security Appliance (Cisco® ESA), previously known as Ironport.
In addition, E-Mails were sent with several types of malformed MIME formatting with executables attached in non-standard ways. One of these E-Mails passed by the executable blocking rules, which was reported to be an E-Mail without an attachment by Cisco® ESA, was accepted as a valid E-Mail with an executable attachment by Microsoft® Outlook. It was found that various other types of file could be sneaked past Cisco® ESA using the same method. Interestingly, if the malicious email was then forwarded outside the organisation via Cisco ESA the same executable was blocked.
Whilst the CVSS3 score given by Cisco® in their advisory in August 2018 was 5.3, based on a minor integrity weakness in Cisco® ESA, the impact of this vulnerability could be greater given that malicious E-Mail is used to proliferate malware infected files, such as Trojans, Viruses and Ransomware. The exponential growth in E-Mail borne attacks has been observed since the beginnings of the Security Industry and is continuing to grow given the ease with which new malware can be developed using tools available on the Dark Web.
Cisco® ESA versions 10.0.0-203 and 11.0.0-264 are known to be affected however, Cisco has listed the issue as ‘Fixed’ but has not indicated where updated ESA software can be downloaded.
One interim workaround may be to create custom rules to looks for strings like ‘.exe’, ‘.com’, ‘.dll’, ‘.ps1’ and block E-Mails matching those however, due to Microsoft CreateNewProcess API executables with non-matching extensions may still execute.
InteliSecure recommends ensuring that endpoint security and Anti-Virus products be kept up to date. Application white listing should also be implemented so that users can only execute authorised executables. Additional Intrusion Detection or Intrusion Prevention devices could also be considered. To defend against ransomware, InteliSecure recommends that offline backups be taken of all important data. If an incident occurs, backups should be scanned to ensure that files are not infected before they are restored.
Please refer to the Cisco Advisory for further information: https://bst.cloudapps.cisco.com/bugsearch/bug/CSCvh03786
InteliSecure would like to thank our client for allowing us to pursue this vulnerability to try and encourage a fix to be produced.
InteliSecure would also like to thank the Cisco® developers and PSIRT for dealing with this issue rapidly.
If any organisations are unsure whether their Cisco ESA system is vulnerable InteliSecure would be happy to discuss this issue further.
The Proper Role of Cyber Insurance in Enterprise Risk Management
In AT&T’s 2017 Global State of Cybersecurity survey, 28% of respondents saw cyber insurance as a replacement for cyber defenses. Part of the issue is frustration with the apparent lack of effectiveness of cyber spend in reducing the prevalence in incidents, while part of the issue is a desire to make this problem someone else’s problem. But the fundamental issue is actually a misunderstanding of risk management.
One of my favorite similes in Information Security is that risk is like energy, it cannot be created or destroyed, rather, it simply changes forms. Risk has four forms of treatment: acceptance, avoidance, mitigation, and transference. All risk, whether identified or unidentified, falls into one of the four categories. Information Security is a risk mitigation strategy and cyber risk insurance is a risk management strategy. Therefore, if you were to ask me if you should mitigate risk or transfer risk, my answer would be “Yes”. You should do both to varying degrees, and the proper amount of investment in each is dependent on the risk profile of your organization, but asking whether you should do one or the other indicates a misunderstanding of risk and risk treatment. Therefore, even though most readers are likely familiar with the terms defined below, it is clear that understanding of these terms is not ubiquitous.
This is the default strategy. If you were to do nothing at all to identify or treat the risk in your business, risk still exists. Consequently, ignorance of risk is de facto acceptance of that risk. Put another way, in order to apply any risk treatment strategy other than acceptance, the risk must be identified and treated. If risk isn’t identified, the vast majority of risk is automatically accepted. Risk acceptance isn’t necessarily bad, so long as it is identified and consciously accepted by someone who has the authority to accept the level of risk on behalf of the organization. I often tell people that CISOs that get in the business of accepting risk on behalf of the organization are the reason why the average tenure of a CISO is so short. Some minor risk can be accepted by the business units, but risk acceptance is generally the domain of the CEO.
Risk avoidance is sometimes popular in organizations with limited resources because it has no direct cost. This strategy essentially says if something is risky, we will simply not do it. The classic example of Risk Avoidance is turning off USB access for all employees because you are concerned sensitive data will leak. A risk mitigation strategy for loss of sensitive data is to deploy a Data Loss Prevention technology, but those technologies may appear to be expensive to deploy and maintain, so the organization instead chooses to disable a core capability of their organization’s computing environment. While disabling the capability may not have a direct cost, there is often a significant opportunity cost manifested by lost productivity in doing so. Since risk avoidance is generally accomplished by limiting features of the IT environment, risk avoidance or the lack thereof is likely the domain of the CIO. While risk avoidance can be a problem from an opportunity cost perspective, it is often more of a problem when a CIO deploys a change or a technology that deprecates the avoidance of a risk without working with the CISO to mitigate that risk and instead accepts the risk on behalf of the CEO. This is a recipe for disaster that manifests itself time and again.
The entirety of cyber security falls into risk mitigation. Everything the CISO does is a mitigation strategy whether the solutions he or she deploys are people, process, technology solutions or any mix of the three. It is notoriously difficult to quantify risk mitigation as it is hard to quantify what didn’t happen but likely would have happened if a specific control was not in place. However, since risk does not get created or destroyed, it is much easier to quantify accepted or avoided risk. Looking at risk mitigation as movement from one of the other categories allows an organization to quantify risk in their environment and therefore define the benefit of the aggregate of their risk mitigation strategies against their cost.
Risk Transference is the classic insurance use case. The problem with risk transference is that you can only transfer risk for the direct costs associated with an incident. While this is a minor problem for insurance products like home and auto, it is a major issue for cyber risk insurance given that a full 66% of an average breach in the United States is categorized as an indirect cost. Put another way, if you are one of the 28% of companies that use cyber risk insurance as a replacement for cyber defense, your best case result is that you have transferred 34% of your risk and accepted 66%. In reality, you have likely not identified and transferred all risk factors, so you are likely accepting upwards of 80% of your risk. If you are the CEO and highly risk tolerant, this might be an acceptable strategy, if you are not, you likely don’t have the authority to make such a bold decision. Because risk transference is a strategy that is generally associated with buying down identified risk, it is most often the domain of the CFO.
Jim Collins is an influential author of business philosophy books who has a multitude of quotable sayings, but one of the concepts that he is known for is the tyranny of the OR and the genius of the AND. This is applicable to risk management in a profound way. Those that are asking if they should buy a cyber risk insurance policy OR deploy cyber defenses are asking the wrong question. Essentially, a healthy organization should have Risk Mitigation strategies AND Risk Transference strategies AND Risk Acceptance Strategies AND likely some Risk Avoidance strategies. Ultimately, the quantity of risk and the likelihood that risk materializes are the factors that should go into the calculation of a Risk Transference premium, so it could be argued that Risk Transference should be the final strategy deployed in order to avoid accepting risk that cannot be mitigated or avoided. Unfortunately, too many organizations are trying to finish before they start and leading with the end.
While all four risk management strategies are important to treat risk in an organization of any size, it is important to ensure we do not allow frustration to prevent us from deploying sensible risk mitigation strategies. The truth is there is no easy button. That includes cyber risk insurance. It’s true that cyber risk insurance is a relatively immature market, but regardless of how much it matures, it will always be a part of the equation of how to treat risk and not the answer. Just as light energy and heat energy are inextricably linked, risk mitigation, risk transference, risk avoidance, and risk mitigation will always be components of a sensible risk mitigation strategy. The proportions of each will vary by organization, but they will all be omnipresent. So the answer to the question of whether an organization should buy a cyber insurance policy or build a program to mitigate as much risk as possible, is “Yes!”, and it always will be.
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