1. cyber risks in shipping
5th Asia Marine insurance conference
Hong kong, November 2017

2. Latitude brokers
Independent Marine Retail and Reinsurance Brokers
Hong Kong, Singapore and Seoul
4 Founding Partners
Andrew Brooker, Founding Partner
Marine Insurance industry since 1991 in London, Singapore and Hong Kong: Sinclair Roche & Temperley (London lawyers), WK Webster (Cargo consultants), Marsh London & Singapore, Board Director of FP Marine

3. Cyber risks in shipping
Everyone in shipping is at risk – to greater or lesser degrees, so…
Why aren’t more policies being bought?
Even after successful attacks close to home:
AP Moller-Maersk ransomware attack:
17 APM container terminals forced to stop all loading/discharging
No cargo bookings for 11 days
1500 software systems shutdown
Disrupted operations in:
container ships, port and harbor tugs, drilling and oil production
offices around the world
Total cost to Maersk – USD200,000,000- USD300,000,000
Fedex victim of NotPetya resulting in loss of data and subsequent loss of income
Total cost estimated by Fedex - USD300,000,000

4. Cyber risks landscape Clause 380 Business Interruption
Risk consultants
Clause 380
Losses paid, unrecoverable
Social Engineering Fraud
Fake President Fraud
Corporate Governance
Counterparty risk
Cargo theft
Software Reinstallation
Ransomware
Costs of advising clients
Legal costs
Assured
Cyber at Sea training
Social Media & PR
D&O cover
Privacy Ordinance
Business Interruption
Counterparty Onboarding procedures
IT Department
Malware
Fines
Third Party Liability
E-commerce
Regulatory oversight
Loss of Hire
Accounting functions

5. Current insurance solutions
Insurance policies required:
Clause 380 buy back H&M
Clause 380 buy back War
Clause 380 buy back Loss of Hire
Non-Marine Cyber Risks with amendments
Non-marine Cyber Liability with amendments
Non-Marine Commercial Crime policy with amendments
Delay Insurance (new cyber option announced last week)
P&I insurance still lacks certainty of cover (neither an exclusion, nor a peril)
Specialist response consultants still not part of the cover available
Marine insurance industry isn’t, yet, providing a single, purpose built, cover for the core cyber risks

6. opportunity Marine market K&R had similar traits:
Operators had no prior experience of the risk
Everyone trading through GoA was exposed
Vessel hardening advice driven by BIMCO
Insurance complimented risk management requirements, demanded improvements
Insurance required armed guards. First minimum number, then experience, then accreditation/contract form
Insurance gave access to response consultants
Necessity led to improved risk management, led to fewer losses
The marine market responded to a real, evolving, threat and created fit for purpose policies that worked.

7. Response consultant Marine market 24/7 emergency contact details
Full authority from underwriters to manage:
IT Forensic
Data Reconstruction
Business Interruption
Legal PR
Clients can handle all of the above individually….theoretically

8. Response consultant Marine market IT Forensic Severity assessment
Ransom – to pay or not to pay?
No conflict of interest with IT dept – solution focused
Data Reconstruction
Aggregation of experience from other attacks
Advice on quickest resolution
Business Interruption/ACOW
Same underwriters on both aspects – recovery and BI
Forensic accounting

9. Response consultant Marine market Legal Ransom payment legality
Specialist cyber lawyers in each jurisdiction
Response to regulators/stock exchange
Core contract positions post-cyber attack PR
Reputation management
Advisory to clients (BI management)
Particularly relevant in a highly competitive environment
How long will it take a shipping company to find all the above experts in the middle of an attack?
Where does a shipping operator start?

10. opportunity Marine market
Create a marine product for the shipping industry:
A risk management solution as well as financial protection
Based upon existing risk management guidelines – eg BIMCO, Cyber at Sea
Remove non-marine terms that are marine loopholes
Include access to a response consultant!
Include basic, clear, cover for onshore risks of:
First party loss;
Counterparty liability;
BI/ICOW;
Response consultants
And the many things a clever underwriter will offer in a product that is needed by everyone and purchased by few…

11. THANK YOU