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Companies under threat in more dangerous world

Posted On: Mar. 15, 2015 12:00 AM CST

NEW YORK — The world situation is “a little bit depressing,” the former chairman of the U.S. House Intelligence Committee said.

During an opening keynote address at Business Insurance's Risk Management Summit in New York earlier this month, former U.S. Rep. Mike Rogers, R-Mich., noted that threats to the United States and U.S. companies include traditional military threats, not-so-traditional military threats and cyber threats.

For example, China is building islands in the South China Sea to expand its territorial waters. Doing so conflicts with claims of neighboring countries, notably Vietnam and Japan, he said.

Mr. Rogers predicted that a skirmish will occur between China and another country, probably Japan, in the next 24 months.

China also is active in outer space. In fact, it has already “militarized” space by successfully destroying a satellite in a 2007 test, and the United States will have to build an infrastructure in space that can survive a military attack, he said.

North Korea presents a threat as well, having successfully fired a pair of ballistic missiles. Adding to the danger is the character of North Korean leader Kim Jong Un. “We're not sure he's a rational actor,” Mr. Rogers said.

State actors also present a threat to U.S. interests in the cyber world. “I think we're in for some rough sledding” regarding cyber security, he said.

State actors and criminals also pose threats to private companies, he said in citing an attack on a German steelmaker by what was believed to be Russia. Hackers got into the company's computers and made it impossible to turn off a blast furnace, causing extensive damage.

Attacks such as that on Sony Corp., believed launched by North Korea, underscore that the “game has completely changed,” said Mr. Rogers.

“Companies don't really understand what's on their networks,” and apps are the best way to infiltrate a corporate network, he said.

The event's closing keynote speaker also addressed cyber security issues.

Joel Wood, senior vice president of the Washington-based Council of Insurance Agents and Brokers, said while two cyber security bills have been introduced in the Senate, they fall short of what the council believes to be necessary to facilitate sharing cyber threat information because they do not provide businesses that do so with adequate protections against liability.

He also addressed last year's failed attempt to renew the federal government's terrorism insurance backstop, a failure that he called a “nightmare.” The program lapsed after the Senate failed to move on an extension bill in December. The new Congress made approving legislation to extend the program through 2020 its first major legislative action in January.

Mr. Wood noted that former Sen. Tom Coburn, R-Okla., has been blamed for blocking reauthorization because he objected to a provision that created the National Association of Registered Agents and Brokers. But Mr. Wood said Senate Democrats also objected to a noninsurance-related provision that amended a portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act.