Cyber cover will become a must buy for all businesses, one global head has said, with brokers set to play a “huge” role in the development of the product.
, CEO of Lloyd’s,
told Insurance Business
that cyber insurance will become a must-have for all manner of businesses as the risk landscape continues to shift.
“I think cyber insurance is going to be one of those must-buys because there are only two types of businesses: businesses that know they have been hacked and businesses that don’t know that they have been hacked,” Beale said.
“The use of technology means that the risk of cyber attack is going to be one of the key risks that all businesses face and really they are going to be buying insurance to protect themselves against it like they do the other perils.
“I do believe cyber insurance is going to be a standard product offering before too long and I think the insurance industry, certainly from a Lloyd’s perspective, is keeping up.”
A joint Lloyd’s and Cambridge University study has found that Sydney's GDP ranks 12th in the world in terms of risk of cyber attacks, whilst cities across Australia could see a US$16bn economic hit. The Lloyd’s City Risk Index 2015-2025
found that global GDP at risk from cyber attack stands at US$294 billion.
In Australia, Lloyd’s has seen the amount of cyber insurance being purchased increase 168-fold in the last two years, Beale said, as the risk becomes more of a concern for businesses.
Beale stressed that mandatory breach legislation has been a key driver for the growth of cyber insurance in other parts of the world, and with all signs pointing to a similar outcome in Australia, the cyber insurance market is set to grow further.
“Businesses aren’t necessarily still being complacent but I don’t think that it is necessarily at the right level in the boardroom yet,” Beale continued.
“What we have seen elsewhere in the world is as soon as you’ve got some regulation out there, a requirement for businesses to report breaches when there is a loss of personal data, that is one of the key drivers for elevating the risk up to the boardroom.”
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