AIG’s E-Business Risk

8/4/2019 AIGs E-Business Risk

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Presented byKaushal Kumar, Era Barrow, Upasana Agarwal, Lena Projestha, Sarath P.


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It was established in 1919 at Shanghai in China.

Earlier it was known as American Asiatic Underwriters

(AAU).

In 1926, it entered the US with new name called American

International Underwriters (AIU).

European war was the cause to became major player in the

insurance market.

AIU acquired a majority stake in the Globe & Rutgers Fire

Insurance Company and its subsidiaries too.


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Mr. Greenberg was elected as the president of AIU

In 1970s it became a leading global insurance organization.

By the late 1980s, AIG became renowned throughout the

world for its innovative strategies and market leadership.

AIG operated in four main business segments, namely,

domestic & foreign general insurance, domestic & foreign

life insurance, financial services and retirement services &asset management.


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E-Business (electronic business) is, in its simplest form, the conduct

of business on the Internet. It is a more generic term than

e-Commerce because it refers to not only buying and selling but

also servicing customers and collaborating with business partners.


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Internet facilitate to connect from anywhere, to anyone,

at any time create risk that cause huge financial losses.

It is a potential target of hackers.

Enormous financial losses if confidential information fell

into competitors hands.

Threat of law suites from customers on the grounds of

invasion of privacy due to loss of private info relating totheir income and expenses.


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Hackers sends viruses and corrupts, deletes or alter the

data or shut down or lock the system by changing the

password.

Hacker could break into the companys website, place

some information there and then accuse the company of

having utilized and published other peoples copyrighted

material.

IT risk was the most unpredictable, challenging tounderstand, manage and most expensive for the corporate.

No problem, I have an

insurance


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The corporate generally adopted security measures such as

firewalls, intrusion detection systems and anti-virus

software.

As information and communication technologies changed

at an extremely rapid pace, each new technology brought

with it new risks.

Hackers were always a step ahead of the corporate and it

became extremely difficult, if not possible, for them toinstall full-proof data protection systems.

Launches a denial of service attack which makes it

impossible to sell product over the companys website.


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$10,166,400$701,500

$70,105,900

$27,382,340

$6,830,500

$11,767,200

$65,643,300

$5,148,500

$2,754,400

$76,000

$706,000

finacial fruad

telecom fraud

theft of proprietary info.

virus

laptop theft

insider net abuse

denial of service

sabotage

system penetration

telecom eavesdropping

active wiretapping


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We recognized that the internet would have a dramatic

impact on the lives of our customers and the risks faced

We needed to respond..

The new division was necessary because we recognized

that these risks were fundamentally different, and they

wouldnt fit easily into our current product group.


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AIG e-Business Risk Solution was launched in January

2000. It is exclusively to address the risks associated with

online business.

It has broadened the portfolio of its insurance product

offering by introducing a series of comprehensive liability

coverage for companies conducting business on the

internet.

It covered claims arising from the errors or deficiency inservice which might cause and harm, loss, or

dissatisfaction to service recipients.


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Insurance cover was also provided against unknown

viruses, unauthorized use or access of systems, allegations

of infringement of copy rights and trademarks.


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It is online and offline both.

Before submitting the application, weather online or

offline, the applicants were required to undergo a throughsecurity-risk assessment.

A feedback report is provided by company on the state of

its network security.

The report s are explaining the security weaknesses andsuggesting the solutions.


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It is very expensive, at least 25% higher than those oftraditional insurance.

It was not very popular even among the big companies.They trusted their own IT department.

Reason for high e-insurance costs was the cost of networksecurity risk assessment tests.

These tests had to be taken more than once. It caused

further increased the financial burden.

It was not always possible to determine the source ofcomputer attack and the geographical area that gotaffected.


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Tie-up with technological alliance with Unisys and

developed a shared-risk business model.

They also developed a business process methodology thatincluded both a web-based security assessment tool and

onsite assessment.

The risk assessment report was provided to the applicants

free of cost whether or not they bought the insurance.

It offered to provide security assessment of the clients

overall system on an annual basis.


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AIG netAdvantage

AIG netAdvantage express

AIG netAdvantage Professional

AIG netAdvantage Commercial

AIG netAdvantage Liability

AIG netAdvantage Property

AIG netAdvantage Sequrity

AIG netAdvantage Complete

AIG netAdvantagae Suite


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Corporate all over the world have accepted the need to

protect their businesses against cyber risks.

High risk entities like financial and energy companies areproactively opting for e-insurance.

Mandatory for financial institutions and healthcare

companies to take compulsory e-insurance protection.


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Insurance company should terrorism and cyber terrorism

coverage.

E-insurance coverage as an important perquisite for almostall firms using the internet for information, communication

and online transactions.

As in the developed countries, govt. of developing

countries should implement it as mandatory for certain

types of firms.


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Documents

AIG’s E-Business Risk