Cyber Insurance: Insurance Monitor published by Insurance Times out today online and in report
Cyber related risks are a growing threat to companies around the world. A threat that is being largely ignored. If a cyber attack breaches a companies’ security there are enormous financial and reputational implications of having no cover.
Read the an excerpt from our latest Insurance Monitor published by Insurance Times below and the full report, Cyber Insurance: The strategies, the innovators and mid-term prospects, the latest Insurance Monitor published by Insurance Times (out today).
Companies yet to embrace standalone cyber policies
Cyber risks insurance has been slow to take off in the UK, despite the obvious threats and the headway the product has made in the US market.
The rising cost of cyber crime, however, growing online presences and data collection, and the sheer number of adversaries and methods of attack, suggest this status quo will not remain for much longer.
The market may still be relatively small, but insurers, brokers and underwriting agencies have developed a sophisticated array of products to help companies cope with the damage to both tangible and intangible assets that a cyber attack can cause.
Even so, it will take more than just insurance to help vulnerable companies protect themselves against the growing cyber threat.
The time is right
Cyber insurance has been slow to take off in part because many companies have tended to rely on the limited protection offered by standard policies such as comprehensive general liability and errors and omissions liability, and have not sought specialist, standalone cyber cover for their risks.
Some firms clearly feel they have more important risks to tackle than just cyber, and so are not willing to spend the extra time and money needed to research and buy the coverage. In a poll of European risk managers published in July by Insurance Times’ sister publication StrategicRISK, 81% of respondents said that cyber risk was not the biggest concern for their business.
Another part of the reason could simply be ignorance of the threat. The same proportion of respondents to the StrategicRISK survey also thought their boards did not fully understand the current reality of cyber risk. The result is that cyber liability insurance accounts for a tiny fraction of annual UK general insurance premiums written – some estimate as little as £3m or 0.01% of the total UK general insurance premium.
However, many expect the tipping point is closer than ever. A key reason is the high cost of cyber crime. Cyber-security firm Symantec’s 2013 Norton Report, released on 1 October, found that the global cost of consumer cyber-crime was $113bn (£69.7bn), up 2.7% from the $110bn reported in last year’s study.
Also, not only do companies have more of an online presence than ever before, they are collecting more and more customer data, which is stored electronically and is vulnerable to attack.
If that were not enough, the sheer array of possible weaknesses that could be exploited and the range of possible adversaries, which include not only criminals and terrorists but governments, mean companies are highly vulnerable to attack.