Smart Machines May Prove to be a Bonanza for Risk Underwriters and Automation Security ISVs

Automobile manufacturers have publicly expressed serious determination to quickly add more features to permit drivers to engage in personal computing activities like reading email, chatting with colleagues, and more. But all of this may not, after all, be a good thing. Nick Bilton of the New York Times published a post to the Bits blog, Disruptions: As New Targets for Hackers, Your Car and Your House. This post recounts some demonstrations presented at this year’s Defcon held in Las Vegas: “Imagine driving on the freeway at 60 miles per hour and your car suddenly screeches to a halt, causing a pileup that injures dozens of people. Now imagine you had absolutely nothing to do with the accident because your car was taken over by hackers.” (quoted from Mr. Bilton’s article as posted to the New York Times’ website, a link to which has been provided above”.

Clearly there is substantial cause for concern if Ethernet data communications capabilities are added to cars without a set of security controls capable of successfully defending them from malicious cyber attack. Cars are moving vehicles, usually weighing in excess of a ton, or more. It does not take much of an imagination to envision the destruction a rogue automobile can wreak in any one of a voluminous set of ways, if controlled by individuals with nefarious intentions. We think automobile manufacturers must completely verif the effectiveness of security controls purported to be capable of protecting smart cars from hackers, and, further, certify them prior to adding these features to cars.

The positive side to all of this, if there is one, is a substantial market for ISVs with security systems for precisely this type of application. While we are not in touch with any of these businesses, we think some excellent candidates can likely be found in the aerospace industry.

There is also an excellent market emerging for insurance underwriters willing to provide products for the cyber terror market. The kind of frightening event Nick Biltin recounts in his post can be a bonanza for risk insurers willing to service these markets.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

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