Chubb CEO Calls for Government-Business Partnerships to Counter Growing Cyber Crime Threat to Global Economy.

Business Editors

PARIS--(BUSINESS WIRE)--Oct. 17, 2001

The Chubb Corporation (NYSE:CB) Chairman and CEO Dean R. O'Hare today warned governments and businesses that an attack by terrorists or hackers on the Internet could seriously damage global commerce and impede economic recovery.

"Business transactions would be impeded or cease, complicating our economic recovery and sending our global stock markets into a tailspin. We must not allow this to happen," he told European business executives. Leaders of business and government "need to better understand the enormous threat we face and take measures to secure cyberspace."

Mr. O'Hare, who is chairman of the U.S. Council for International Business and a trade policy adviser to President Bush, was speaking at "Cybersecurity Risks: Can Governments and Business Meet the Challenge?" an event co-sponsored by the Chamber of Commerce and Industry of Paris and the Chubb Group of Insurance Companies to promote joint action by governments and business.

He emphasized that the ease of an attack on the Web, which would require just three legally obtainable "weapons" - a PC, a modem and an online connection - means that a hacker bent on disabling the Net could just as likely be a child as a terrorist.

Terrorists and hackers already have stolen the identities of others and engaged in credit card fraud via the Internet, and it appears that there is nothing to stop them from unleashing destructive viruses, stealing security information, shutting down vital services or extorting money, he said. The Nimda virus infected 2.2 million computers worldwide, inflicting $370 million of damage on electronic conglomerates, banks, Internet service providers and government sites, especially in Europe.

"A full-scale cyber war remains to be seen, but the possibility makes the need for cyber security measures - including cooperation among businesses and governments worldwide - greater now than ever before. Even before [the terrorist attacks on] September 11, cyber security was a major concern for both business and government. The number of incidents involving hackers and other cyber thieves was steadily rising," Mr. O'Hare said.

News of increased criminal activity on the Net appears around the world. In the United States, for example, the Computer Security Institute reported that 85% of companies admitted their networks were breached last year. In addition, 64% acknowledged significant financial losses due to the breaches.

Mr. O'Hare highlighted the growing financial losses caused by cyber crime, estimated by PricewaterhouseCoopers to have cost businesses worldwide more than $1.5 trillion last year. In Europe, 43% of companies see cyber crime as the biggest and most dangerous type of criminal activity of the future.

"The bad guys have their sights set on the Internet as a way to terrorize or steal from us. Our responsibility is to thwart their evil intentions," he said. "At Chubb, for more than 20 years, we have led the charge against high-tech crime. As one of the world's top insurers of both high-tech firms and financial services organizations, we believe there are effective measures that business and government can take - independently and jointly - to identify, quantify, control and finance cyber-related risks."

Mr. O'Hare suggested that serious momentum could be given to the fight against cyber crime through education, risk control measures such as updating anti-virus software, security programs and procedures, and contingency planning. He urged companies to report cyber crimes to police despite fearing damage to their reputations. Otherwise, they will remain vulnerable to future crimes.

Mr. O'Hare also was critical of the lack of funding for law enforcement, highlighting as an example the fact that 13,000 of the Federal Bureau of Investigation's computers are so old they can't run basic software. He called on governments to create globally consistent legislation to track and punish perpetrators of cyber crimes.

Cyber insurance will provide the "last line of defense" to a company's bottom line. Although insurance continues to evolve for cyber risks, eventually it will help to drive risk reduction, he said.

"To defeat cyber terrorism and crime, the emphasis must be placed on partnerships among business, government and law enforcement. That cooperation must exist both within, and beyond, the borders of any single country," he concluded.

The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property and casualty insurance for personal and commercial customers worldwide through 5,000 independent agents and brokers. Chubb's global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia. More information on the company can be found at www.chubb.com.