(PRWEB) June 23, 2004
Austin, Texas --- June 23, 2004--- The Akamai service interruption of Tuesday 15 June, that affected Yahoo!, Google, and Microsoft shows risks of doing business over the Internet cannot be ignored or eliminated, claims John S. Quarterman, CEO of InternetPerils, Inc. InternetPerils is the industry's leading provider of Internet risk management products for insurers, financial institutions, banks, telecommunications providers, government, and enterprises that need to effectively manage their Internet business risks.
Businesses currently use technical solutions for Internet risks including worms, viruses, cable cuts, and routing flaps. Firewalls, intrusion detection, intrusion prevention, and, in this case, content distribution, are good and useful. Yet none of them alone and not even all of them together can handle every circumstance.
ÂYou can put all your cargo in a convoy on the stormy seas of the Internet, but what do you do if the convoy sinks?'' asks Quarterman. When businesses face risks of fire or hurricane or flood, they install sprinkler systems, put up storm windows, and establish evacuation paths, explains Quarterman. ÂThey also buy insurance. Businesses that use the Internet need to deal with risks beyond their control through new risk management strategies, starting with Internet business continuity insurance.Â
ÂSuch policies may be hard to find today,'' said Peter F. Cassidy, Director, InternetPerils. ÂBut so was sea voyage insurance in the 17th century at the beginning of the great age of seafaring. It is time for businesses to demand insurance for faring on the global sea of the Internet.''
How can insurers afford these new risks? Partly from charging rationally priced premiums, and by taking out appropriate reinsurance to lay off the risks they do bear. Cyber risk policies have to date been hampered by the lack of actuarial data or usable proxies on Internet risk --- and the difficulty of isolating it and instrumenting it.
Key to capitalizing the risk is establishing a market for it. Catastrophe bonds may be the answer, just as they are used now for hurricane, flood, fire, and earthquake risks. Underwriters for low frequency, high-loss events like big earthquakes have used these kinds of bonds, generally issued by investment banks or reinsurance companies, as a financial backstop. Such new risk management solutions complement traditional security and performance solutions.
ÂIf you are perfectly insured against liability, why should you invest in risk management.'' wrote InternetPerils Advisor Dr. Hal R. Varian. ÂBut this ignores the incentives of the insurers: they only want to insure clients who use good security practices, giving them every incentive to instruct their clients in how to improve their Internet security.''
As global dependency on the Internet advances in every dimension of life and commerce, so does the necessity of Internet risk visualization, risk quantification, and the establishment of Internet-relevant risk transfer instruments. InternetPerils, Inc. delivers automated and interactive products through the web, plus training and professional services that provide the actuarial information insurers need to extend Internet business risk management strategies into insurance and beyond. Only at InternetPerils, Inc. do the disciplines required to authentically engage these exigencies meet to build a bridge to the future of Internet risk management.
Supernova 2004 will be held at the Westin Hotel in Santa Clara, June 24 & 25. For more info see http://www.pulver.com/supernova/
John Quarterman is a world-renowned Internet expert. He will be speaking at Supernova 2004 on 6/24, Thursday afternoon at 3:30. An abstract of his conference topic, ÂDecentralized Risk,Â can be found at http://www.quarterman.com/jsq/talks/supernova20040624.html
His vita can be found at http://www.quarterman.com/%7Ejsq/index.html
For more information, contact InternetPerils about its white papers on insurance and catastrophe bonds.
John S. Quarterman
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