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February/March 2014 26
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Willis Study: Tech firms point to dependence on

outsourced vendors as cyber threat
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Awareness of outsourced vendor expo- sure needs to be high on the radar of all exposures at higher levels than others in the Fortune 1000, an indication that those
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tech and telecom firms.”
firms may be underestimating their cyber
risk exposure.
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Telecom Companies Describe Their Cyber For more visit www.willis.com
AscdiNatd The global alliance of the it channel
Liability Exposures, examines cyber risk As an Independent Distributor, A1 Teletronics, Inc. is not affiliated with the manufacturers of the products it sells except as expressly noted otherwise. Any and all trademark rights associated with the manufacturers’ names and products are owned by the respective manufacturers.
disclosures made by the technology and
telecommunications (tech/telecom) sector IntelliSIPTM
of the Fortune 1000. The study is part of
an ongoing Willis series reporting on how U.S. public companies are describing their
cyber risks in financial documents.
“We looked at how tech companies
estimate their own cyber exposures, and
they’re seeing higher frequency and sever-
ity of exposure than others in the Fortune The
1000,” said Ann Longmore, the head of
D&O, Fiduciary, and EPL Products for
Willis FINEX in North America and co-
author of the study.
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“Significantly, they are twice as con- cerned about outsourced vendor risk,”
Longmore added. The study found that
tech/telecom companies reported concerns
Way to Grow about the potential for outsourced vendor
risk at a rate more than double other large
corporations (25% versus 12%).
Outsourced vendors are comprised of
Your Telecom any organization providing data, IT or
security services.
“We find this compelling because these
companies are by and large the cyber vendors for the rest of the Fortune 1000.
Business
They’re seeing a big risk involving their
own kind,” Longmore said.
“Technology and telecommunications
providers that are at the heart of our cyber
infrastructure—which, increasingly, is our
business infrastructure—are indirectly tell-
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may make us more vulnerable than many
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companies realize. The awareness of that
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and e-risk, Willis FINEX in North America
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cyber risk, Keegan said. “If you’re a pas-
senger in an airplane and you see the pilot
putting on a parachute, it’s probably a good
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Other key findings of the study include: • Thetech/telecomsectordisclosedseveral
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cyber exposures at a significantly higher
rate than the Fortune 1000, including:
loss or disclosure of confidential infor-
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and cyber liability.
• In detailing cyber risk remedies, 44%
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of tech/telecom companies cited the use
of technical safeguards. However, 20%
of tech/telecom companies report inad-
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equate resources to limit cyber losses. This indicates that technical protections
may not be sufficient to contain some
cyber or technology threats.
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• 11% of the sector indicated they pur-
chased insurance for cyber exposures. In
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Willis’s view the rate of cyber insurance
may be substantially higher, particularly
among some sub-sectors.
• Commenting on the study, Sara
Benolken, Willis’s Global Industry
www.voicecarrier.com
Leader for Technology, Media and Telecommunications said, “The issue of