ACE European Group: Over 50% of European Companies Suffered Significant Financial Losses from IT System Failures in the Last Year

The research also showed that close to 40% of those surveyed hadexperienced losses as a result of damage or misuse of systems or databy staff or contractors and that nearly 25% had suffered as a resultof computer crime, including 'phishing' - using forged emails orwebsite pages to obtain data - and hacking.

When asked what specific tools and strategies companies planned touse to manage IT risks over the next three years, more than 70%indicated they would continue to invest in greater security andprotection such as firewalls and anti-virus software. ACE believesEuropean businesses should place more emphasis on reducing the impactof technology failure or criminal acts.

Shaun Cooper, ACE's senior network risk underwriter, commented:"There is no 'silver bullet' to prevent losses from downtime, securitybreaches or mis-use of IT by staff. Technology cannot guaranteenetwork security. Despite a continual investment in security andprotection services, this survey shows businesses are stillexperiencing significant financial losses."

"Although many firms in the survey saw increased investment inbusiness continuity and disaster recovery planning as key areas overthe next three years, the research also reveals the lack of awarenessof alternatives such as risk transfer opportunities, as a means ofreducing the impact of technology failure or criminal acts."

"ACE's own experience as underwriters of specialist network riskinsurance shows that businesses believe their traditional property andliability programmes will cover losses. But generally they do notcover damage to intangible assets, which leaves companies vulnerable.Business must recognise that transferring the risks to vehicles suchas specialist technology insurance products will reduce their exposureto significant financial losses."

Notes to Editors:

ACE

The ACE European Group comprises the operations of ACE Europe, ACEGlobal Markets and ACE Tempest Re Group. With an established presencein 16 countries across Europe and Freedom of Services permissions tooperate in 27 European countries, ACE Europe provides a range oftailored Property and Casualty, Accident and Health and Personal Linessolutions for a diverse range of clients. ACE Global Markets (AGM) isACE's specialty international business, underwriting through ACE'sLloyd's Syndicate 2488 and UK registered company ACE European GroupLimited. 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 ACEEuropean Group can be found at www.aceeuropeangroup.com.

The ACE Group of Companies is a global leader in insurance andreinsurance serving a diverse group of clients. Headed by ACE Limited(NYSE: ACE), a component of the Standard & Poor's 500 stock index, theACE Group conducts its business on a worldwide basis with operatingsubsidiaries in more than 50 countries. Additional information can befound at: www.acelimited.com

ACE Dataguard and ACE Computerguard:

ACE's Dataguard product has been specifically designed forcompanies who have a dependency on their computer network. It bridgesthe gaps in cover with traditional policies and provides leading edgeprotection to take away the resulting first party financial loss, lossof network revenue, data reconstruction and company crisis managementcosts.

ACE Computerguard covers financial losses resulting from physicaldamage to, and breakdown of, computers. Cover includes the cost ofreplacing damaged computer hardware, the reinstatement of lostprogrammes or data, and the increased working costs as a result.

For further information on Dataguard or Computerguard, contactShaun Cooper on +44 (0) 20 7173 7338.

About the research

Global Risk Briefing - IT Network Risks is part of a researchprogramme on global risk issues, conducted by the EconomistIntelligence Unit. The programme is sponsored by ACE, Cisco Systems,Deutsche Bank, KPMG and IBM.

The findings in this press release are based on a survey of 66senior executives from European-based businesses with annual revenuesranging from less than $500m to over $10bn. Fifty three percent of thecompanies participating in the survey were from the financial servicessector. Respondents from 17 other industries participated in thesurvey, including professional services, energy sector companies, andIT and technology firms, and pharmaceutical and healthcare companies.

Previous research in the Global Risk Briefing Project has shownthat almost 60% of Chief Risk Officers and senior risk managers viewnetwork risk as a significant and growing threat to theirorganizations. Network risk and the threats of data and systems crimeare also seen as a significant threat to business reputations, whichcould seriously undermine public confidence in a company's brand andproducts. In addition, almost 50% of respondents cited reputation riskas a significant threat to their organisations.