Inga Beale says recent high profile attacks in the US will trigger a surge in the market
Lloyd’s of London chief executive Inga Beale expects the market for cyber insurance to surge after major cyber attacks on JPMorgan and Home Depot in the US.
Beale told Bloomberg News that many businesses are not yet alert to the risks of an attack or of the need to buy coverage.
She said cyber insurance could cover loss of future revenue and reputational damage, and provide help to get systems back up and running.
“Cyber is a new risk and it is a concern,” she told Bloomberg. “Lloyd’s is at the heart of cyber attacks, providing coverage right now. It’s going to grow dramatically with all the high-profile hacking incidents.”
JPMorgan last week revealed that 76 million households and 7 million small businesses had been affected in one of the largest cyber attacks on record.
A month earlier, Home Depot confirmed a security breach had compromised 56 million payment cards.
Barbican Insurance underwriting manager for cyber, technology and media Geoff White said in August that UK companies spend only £20m a year on cyber security, but that he expected this figure to balloon to £450m within five years. White said the total UK cyber market was worth £3.5bn.
The growth has been put down to the new European Union rules requiring companies to report a data breach or face a fine. Barbican predicts this will spur companies to invest in insurance to cover the cost of dealing with attacks and claims.
In the US, laws were introduced in 2005 to force companies to take steps to protect themselves from cyber attacks, triggering an increase in insurance spend.
US companies spent $1.3bn on cyber insurance last year, compared with $850m in 2012. And that is expected to grow by a further $1bn this year, according to Barbican.