Disruption is a watch-word for many in the insurance industry at the moment but one expert has said that cyber insurance could be a force of disruption in its own right in 2017.
Cyber risks continue to emerge and hit the headlines. Last week’s Yahoo hack was the latest breach, proving that cyber insurance is set to be top of mind both inside and outside the industry in 2017.
The insurance market will have an impact on all manner of businesses over the coming year, Carl Leonard, principal security analyst at Forcepoint said.
“The cyber insurance market will dramatically disrupt businesses in the next 12 months,” Leonard told Insurance Business.
“Insurance companies will refuse to pay out for the increasing breaches that are caused by ineffective security practices, while premiums and payouts will become more aligned with the actual cost of a breach.”
Leonard added that he anticipates the requirements for cyber insurance will become as significant as regulatory requirements, and will therefore impact on businesses’ existing security programs.
Last week, web giant Yahoo! announced that its latest data breach had impacted more than one billion customers. With high profile cyber attacks becoming the norm around the globe, education and awareness around the cyber insurance product continues to develop.
With Inga Beale, CEO of Lloyd’s, noting the cyber insurance is set to become a ‘must buy’ for businesses and the latest research on the cyber market in Singapore finding that ransomware attacks have quadrupled in 2016, insurers and regulators continue to respond to demand.
The Singapore government is set to discuss a new cyber security law in 2017 which would set standards for incident reporting, audits and risk assessments.
Around the world, legislation to introduce mandatory breach notification has been seen as a key driver for the growth of the cyber insurance market and if Singapore were to follow suit, the cyber market could be set to take off in the coming year.
With or without such legislation, cyber prevention, detection, response, and remediation will become more important over the coming year, as Leonard noted that, moving into 2017, businesses will no longer be able to ignore cyber risk.
“Our world is changing, our digital and physical worlds are converging and our view of security must change with it,” Leonard continued.
“As we move in to 2017, the question is no longer if, but when, your business will experience an attack.”
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