News Releases

ACE Cautions Firms on Increased Network Risks from Outsourcing
Jan 10, 2006
LONDON--(BUSINESS WIRE)--Jan. 9, 2006--Organisations which outsource their IT systems are increasing their potential vulnerability to security breaches causing possible long term damage to their business, according to leading insurer ACE European Group Limited (ACE). 

ACE has uncovered a lack of awareness amongst many European businesses of the increasing risks which outsourcing poses to their networks. ACE is also aware that there is a degree of uncertainty among many businesses, both as to the level of protection given to their computer systems and the cover provided by their existing insurance policies.

Shaun Cooper, ACE's senior network risk underwriter, commented: "Outsourcing presents an additional challenge to the security of IT systems. Outsourcing systems does not mean outsourcing the responsibilities for maintaining security. Businesses are not only dealing with their own employees but with those of a third party, often in another country.

"While technology, such as firewalls and anti-virus software, is part of the solution, technology alone cannot guarantee network security, particularly in an outsourced environment,' continued Shaun Cooper. 'Businesses must look to alternatives, including transferring the risks to insurers, in order to reduce the impact of technology failure, human error or criminal activity."

An Economist Intelligence Unit survey in September 2005, sponsored by ACE, revealed that more than half of the European companies polled had suffered significant financial damage as a result of IT system failure, including damage or misuse of systems, by staff or contractors, during the previous twelve months. According to ACE, outsourcing computer operations increase still further the risk of security breaches as responsibility for the protection of the system cannot be outsourced in the same way.

Last year, the National Outsourcing Association (NOA) issued a press release responding to allegations that staff in an Indian call centre had sold data on UK financial services customers. While the NOA said it was unaware of any trends in security flaws in this type of outsourcing practice, it did point out that security should be of concern to any company and that they must ensure that offshore operations are managed particularly carefully.

ACE's Dataguard Outsourcing Insurance has been specifically designed for companies which outsource their IT systems. It aims to fill the insurance 'gap,' offering comprehensive protection against financial loss arising from malicious or accidental incidents to computer networks and telecommunications systems. Data and data media are protected from accidental or malicious acts, such as system failure or a disgruntled employee, at the business' own premises; at other external places of operations (including overseas) as long as the other company has been authorised to process the data; at external backup storage facilities and during data transmission.

'The success and even survival of many businesses today rests squarely on the security and reliability of their technology systems,' said Shaun Cooper. 'Recent problems at outsourced locations only highlight the need for businesses to take a new approach to IT security, an approach combining both physical and technology security tools with specialised insurance solutions."

Notes to Editors:

For further information please contact:

ACE European Group

Communications: Miles Russell +44 (0) 20 7173 7578 or

Network Risk Underwriter: Shaun Cooper +44 (0) 20 7173 7338 or


The ACE European Group comprises the operations of ACE Europe, ACE Global Markets and ACE Tempest Re Group. With an established presence in 16 countries across Europe and Freedom of Services permissions to operate in 27 European countries, ACE Europe provides a range of tailored Property and Casualty, Accident and Health and Personal Lines solutions for a diverse range of clients. ACE Global Markets (AGM) is ACE's specialty international business, underwriting through ACE's Lloyd's Syndicate 2488 and UK registered company ACE European Group Limited. Specialty lines include excess and surplus lines business, Marine, Aviation, Energy and Political Risk as well as Property, Financial Lines and Accident and Health. Additional information on ACE European Group can be found at

The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the Standard & Poor's 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at:

ACE Dataguard:

ACE's Dataguard product has been specifically designed for companies who have a dependency on their computer network. It bridges the gaps in cover with traditional policies and provides leading edge protection to take away the resulting first party financial loss, loss of network revenue, data reconstruction and company crisis management costs.



ACE European Group
Miles Russell, + 44 (0) 20 7173 7578