Guide to Network Defense and

Countermeasures
Second Edition

Chapter 2
Security Policy Design: Risk Analysis
 Objectives

• Explain the fundamental concepts of risk analysis

• Describe different approaches to risk analysis
• Explain the process of risk analysis
• Describe techniques to minimize risk

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 Fundamental Concepts of Risk
Analysis
• There is no situation in which security is perfect
• Risk analysis
– Determines the threats that face the organization
• Security policy
– Statement that spells out
• What defenses should be configured
• How the organization will respond to attacks
• How employees should safely handle the organization’s
resources

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 Risk Analysis Factors
• Risk is defined as the possibility of damage or loss
• Risk analysis
– Study of the likelihood of damage or loss
– Should encompass hardware, software, and data
warehouses
• Assets
– Physical assets
– Data assets
– Application software assets
– Personnel assets

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 Risk Analysis Factors (continued)
• Threats
– Events that have not occurred but might occur
– Threats increase risks
– Can be universal or specific to your systems
– Circumstance-specific threat examples
• Power supply
• Crime rate
• Facility-related
• Industry
– The seriousness of a threat depends on the
probability that it will occur

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 Risk Analysis Factors (continued)
• Probabilities
– Factors that affect the probability that a threat will
actually occur
• Geographic
• Physical location
• Habitual
– Exposure
• Increases if you have factors that increase threat
probabilities
– Make a list and rank your threats probabilities

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 Risk Analysis Factors (continued)
• Vulnerabilities
– Situations or conditions that increase a threat
probability
• Which in turn increases risk
– Examples
• OS flaws
• Application software flaws
• Poorly configured firewalls or packet filters
• Unprotected passwords and log files
• Wireless networks

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 Risk Analysis Factors (continued)
• Consequences
– Significance of an attack impact
– Some consequences can be estimated
– Some consequences are difficult to anticipate
• Return on investment (ROI)
– Helps you calculate your losses after an attack
– You can compare your losses with the cost of your
security measures
• Security measures costs should always be less than
your losses

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 Risk Analysis Factors (continued)
• Safeguards
– Measures you can take to reduce threats
– Examples include
• Firewalls and IDSs
• Locking doors
• Using passwords and encryption
– Residual risk
• What is left over after countermeasures and defenses
are implemented

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 Approaches to Risk Analysis
• Survivable Network Analysis (SNA)
• Threat and Risk Assessment (TRA)

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 Survivable Network Analysis
• Security process developed by the CERT
Coordination Center group
• Assumes that a system will be attacked
– Leads you through a four-step process designed to
ensure the survivability of a network
• Network key properties
– Resistance
– Recognition
– Recovery
– Adaptation and evolution

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 Survivable Network Analysis
(continued)
• Fault tolerance
– Capability of an object to continue operations
despite a failure
• SNA steps
– System definition
– Essential capability definition
– Compromisable capability definition
– Survivability analysis

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 Threat and Risk Assessment
• TRA approaches risk analysis from the standpoint of
threats and risks to an organization’s assets
• TRA steps
– Asset definition
– Threat assessment
– Risk assessment
– Recommendations
• TRA is carried out in different ways by security
agencies all over the world

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 Risk Analysis: An Ongoing Process
• Risk analysis is not a one-time activity
– Evolves to take into account an organization’s changing
size and activities
• Initial risk analysis
– Used to formulate a security policy
• New threats and intrusions
– Create the need for a reassessment of the risk

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 Risk Analysis: General Activities to
Follow
• Risk analysis
– Group of related activities that follow a sequence
• Sequence of activities
– Holding initial team sessions
– Conduction assets valuation
– Evaluating vulnerability
– Calculating risk

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 Analyzing Economic Impacts
• Estimating financial impact or losses
• You can use different statistics models
– Or a software program such as
• Project Risk Analysis by Katmar Software
• Basic information to estimate
– Likely cost
– Low cost
– High cost
• Monte Carlo simulation
– Analytical method that simulates real-life system by
randomly generating values for variables

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 Deciding How to Minimize Risk

• Risk management
– Process of identifying, choosing, and setting up
countermeasures justified by the risk you identify
– Countermeasures go into your security policy

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 Securing Hardware

• Think about obvious kinds of physical protection

– Such as environmental conditions
• Lock up your hardware
– Decide which devices you want to be locked
• Pay special attention to laptops
– Laptops can be lost or stolen easily
• Install startup passwords and screen saver
passwords
– Experienced thieves can circumvent them though
• Encrypt files with programs such as PGP
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 Securing Hardware (continued)

• Conduction a Hardware inventory

– Make a list of servers, routers, cables, computers,
printers, and other hardware
– Be sure to include your company’s network assets
– Make a topology map of your network

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 Ranking Resources To Be Protected

• Rank resources in order of importance

– Values can be arbitrary numbers
• Focus your security efforts on most critical
resources first
• Work in cooperation with your team and higher
management

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 Securing Information

• Electronic assets
– Word processing, spreadsheet, Web page, and other
documents
• Logical assets
– E-mail messages, any records of instant messaging
conversations, and log files
• Data assets
– Personnel, customer, and financial information

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 Securing Information (continued)

• Maintaining customer and employee privacy

– Isolate critical information from the Internet
• Move information from the original directory to a
computer that is not connected to the Internet
• Configure backup software to save critical files
– Other measures
• Encryption
• Message filtering
• Data encapsulation
• Redundancy
• Backups
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 Securing Information (continued)

• Protecting Corporate Information

– Measures include
• Never leave company-owned laptops unattended
• Always password-protect information on corporate
devices
• Encrypt and financial information
• Password-protect all job records and customer
information
• Restrict personnel information to human resources
staff and/or upper management

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 Conducting Routine Analysis
• Risk analysis is an ongoing process
– Company’s situation changes constantly
– Risk analysis should be done routinely to include
these changes
• Consider the following questions
– How often will a risk analysis be performed?
– Who will conduct the risk analysis?
– Do all hardware and software resources need to be
reviewed every time?
• Human emotions can influence risk evaluations
– Some companies do not allow these calculations to
be done manually
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 Handling Security Incidents
• Security policy should state how you will respond to
break-ins
– Fill out a form to record what happened
• Incident-handling procedures
– Describe who will respond to security incidents
– Describe the kinds of incidents to be addressed
• Alarms sent by intrusion detection systems
• Repeated unsuccessful logon attempts
• Unexplained changes to data or deletion of records
• System crashes
• Poor system performance

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 Handling Security Incidents
(continued)
• Assembling a response team
– Security policy should state which security staff need
to be notified in case of an incident
– Security incident response team (SIRT)
• Staff people designated to take countermeasures
when an incident is reported
– SIRT contains
• IT operations and technical support staff
• IT application staff
• Chief security officer
• Information security specialists
• Others
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 Handling Security Incidents
(continued)
• Escalation procedure
– Set of roles, responsibilities, and measures taken in
response to a security incident

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 Handling Security Incidents
(continued)
• Including worst-case scenarios
– Worst-case scenarios
• Descriptions of the worst consequences to an
organization if a threat happens
• Might be unlikely
• Can help you determine the value of a resource at risk

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 Summary

• Risk Analysis plays a central role in defining a

security policy
• Risk analysis covers company’s computer hardware,
software, and informational assets
• Your first task is to assess the level of risk to your
network and its users
• Determine countermeasures for minimizing risk
• Assess threats to your network and the probability
that they might happen
– Determine safeguards and countermeasures
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