About the Authors ix
Acknowledgments xi
CHAPTER 1 Counting the Costs of Cyber Attacks 1
1.1 Anatomy of a Data Exfiltration Attack 1
1.2 A Modern Scourge 7
1.3 Cyber Catastrophes 12
1.4 Societal Cyber Threats 19
1.5 Cyber Risk 21
1.6 How Much Does Cyber Risk Cost Our Society? 24
Endnotes 30
CHAPTER 2 Preparing for Cyber Attacks 33
2.1 Cyber Loss Processes 33
2.2 Data Exfiltration 34
2.3 Contagious Malware Infection 41
2.4 Denial of Service Attacks 56
2.5 Financial Theft 63
2.6 Failures of Counterparties or Suppliers 68
Endnotes 78
CHAPTER 3 Cyber Enters the Physical World 81
3.1 A Brief History of Cyber-physical Interactions 81
3.2 Hacking Attacks on Cyber-physical Systems 83
3.3 Components of Cyber-physical Systems 86
3.4 How to Subvert Cyber-physical Systems 88
3.5 How to Cause Damage Remotely 91
3.6 Using Compromises to Take Control 92
3.7 Operating Compromised Systems 93
3.8 Expect the Unexpected 95
3.9 Smart Devices and the Internet of Things 99
Endnotes 101
CHAPTER 4 Ghosts in the Code 103
4.1 All Software Has Errors 103
4.2 Vulnerabilities, Exploits, and Zero Days 104
4.3 Counting Vulnerabilities 108
4.4 Vulnerability Management 113
4.5 International Cyber Response and Defense 118
Endnotes 122
CHAPTER 5 Know Your Enemy 125
5.1 Hackers 125
5.2 Taxonomy of Threat Actors 127
5.3 The Insider Threat 143
5.4 Threat Actors and Cyber Risk 145
5.5 Hackonomics 147
Endnotes 151
CHAPTER 6 Measuring the Cyber Threat 153
6.1 Measurement and Management 153
6.2 Cyber Threat Metrics 158
6.3 Measuring the Threat for an Organization 162
6.4 The Likelihood of Major Cyber Attacks 170
Endnotes 182
CHAPTER 7 Rules, Regulations, and Law Enforcement 183
7.1 Cyber Laws 183
7.2 US Cyber Laws 186
7.3 EU General Data Protection Regulation (GDPR) 190
7.4 Regulation of Cyber Insurance 192
7.5 A Changing Legal Landscape 194
7.6 Compliance and Law Enforcement 196
7.7 Law Enforcement and Cyber Crime 199
Endnotes 205
CHAPTER 8 The Cyber-Resilient Organization 207
8.1 Changing Approaches to Risk Management 207
8.2 Incident Response and Crisis Management 208
8.3 Resilience Engineering 212
8.4 Attributes of a Cyber-resilient Organization 214
8.5 Incident Response Planning 218
8.6 Resilient Security Solutions 219
8.7 Financial Resilience 225
Endnotes 234
CHAPTER 9 Cyber Insurance 235
9.1 Buying Cyber Insurance 235
9.2 The Cyber Insurance Market 244
9.3 Cyber Catastrophe Risk 248
9.4 Managing Portfolios of Cyber Insurance 251
9.5 Cyber Insurance Underwriting 258
9.6 Cyber Insurance and Risk Management 263
Endnotes 264
CHAPTER 10 Security Economics and Strategies 267
10.1 Cost-Effectiveness of Security Enhancements 267
10.2 Cyber Security Budgets 271
10.3 Security Strategies for Society 276
10.4 Strategies of Cyber Attack 283
10.5 Strategies of National Cyber Defense 289
Endnotes 294
CHAPTER 11 Ten Cyber Problems 295
11.1 Setting Problems 295
1 The Canal Safety Decision Problem 298
2 The Software Dependency Problem 300
3 The Vulnerability Inheritance Problem 301
4 The Vulnerability Count Problem 302
5 The Malware Overlap Problem 303
6 The Vulnerability Lifespan Problem 304
7 The Binary Similarity Problem 304
8 The Virus Modification Problem 306
9 The Cyber Criminal’s Dilemma Problem 306
10 The Security Verification Problem 307
Endnotes 308
CHAPTER 12 Cyber Future 309
12.1 Cybergeddon 309
12.2 Cybertopia 315
12.3 Future Technology Trends 321
12.4 Getting the Cyber Risk Future We Want 328
Endnotes 331
References 333
Index 355
