Cyber insurance: needed but not trusted

Two separate reports released this week show an interesting challenge for the insurance industry regarding cyber policies.

Risk Management News

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Two separate reports released this week show an interesting challenge for the insurance industry regarding cyber policies. The first is from the Association of British Insurers which says that within the next ten years the purchase of cyber insurance policies should be as common among businesses as property insurance. Huw Evans the ABI’s director general will tell a conference today: "Cyber risk is growing rapidly. At the moment, despite more than 80 per cent of large businesses suffering a cyber security breach in a 12 month period, only around 10 per cent have any form of cyber insurance.”

However a new report from KPMG shows that one of the main barriers to purchasing cyber coverage is trust. Senior information security professions who are members of the firm’s International Information Integrity Institute revealed in a survey that they are not convinced that their insurer would pay out in the event of a claim. Seventy-four per cent of those surveyed stated their businesses had no cyber insurance in place although 79 per cent believe that cyber security threats are likely to increase over the next twelve months. For those whose businesses have purchased cyber insurance, 48 per cent think that the policies may not pay out if they need it. The head of the institute Mark Waghorn commented: “Of the information security professionals we spoke to 30 per cent believed the market for cyber insurance does not appear to be sufficiently mature yet. Insurers will need to deliver more comprehensive packages in order to convince the business community that they can and will protect against losses on cybercrime.”
 

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