According to a new survey, the biggest challenge in selling cyber insurance is educating businesses about the need for cyber coverage.
The survey of insurance professionals found that among carriers offering cyber insurance, 40 percent say companies don't think they need cyber coverage and 29 percent believe they're already covered under existing policies. Only 12 percent say the biggest challenge is that premiums are too high
These results come as the cyber insurance market continues to grow, with most insurers surveyed expecting to sell 5 percent or more coverage next year.
“Even though data breaches are in the news every week, many companies still don't recognize that cyber attacks are serious, and that the costs associated with responding to one can be significant and generally not covered under current commercial insurance policies," said Shawn Dougherty, assistant vice president of Specialty Commercial Lines at ISO. "That's why insurers and brokers are working hard to educate businesses and make it easy for them to add cyber coverage to their existing insurance portfolio."
The survey was conducted by Hanover Research and sponsored by ISO.
Highlights from the findings about insurers that offer cyber insurance:
• No dedicated staff: 51 percent have no dedicated cyber insurance underwriters and rely on staff from other lines to sell cyber policies.
• Optional endorsements popular: 92 percent offer optional cyber endorsements to existing insurance policies.
• Risk profile and approach most important in underwriting: Almost half consider the nature of the company's data and its enterprise risk management philosophy to be more important when underwriting cyber risk than whether a company employs security tests and audits, firewalls, and encryption.
• Cyber extortion coverage less common: Only 18 percent offer coverage for cyber extortion, while 79 percent offer coverage for data breach expenses.
• Hospitals considered less hazardous to insure: More than 70 percent say credit card payment processors, banks and financial services, and national retail chains are the most hazardous to insure, while only 14 percent say hospitals and healthcare systems are the most hazardous.
