Fear of cyber-attacks drives sale of insurance up 50%
Total written premium for cyber insurance globally today is estimated at £2bn.
A survey carried out by CFC Underwriting has found that 40% of insurance brokers have seen their cyber book grow by 50% in the last 12 months.
The insurance bosses surveyed noted that “fear factor” of impending and expensive attacks played a big part in the increase in policies.
This demand is expected to continue into 2017 as cyber insurance policies become a must have for many companies.
The report noted that claims amongst their customers had increased by 78% from 2015 to 2016.
Speaking at the event, Lloyd’s chief executive office Inga Beale, said: “There is a huge exposure out there for businesses and there is still a certain complacency amongst them that they have it under control.
Graeme Newman, chief innovation officer at CFC Underwriting added that cybercrime was the fastest growing form of crime in the world.
“This means that for UK firms, it is not a case of ‘if’ you’ll experience a loss, but ‘when’,” he continued.
“As the nature of crime changes, so too must insurance policies. The value of intangible assets now generally outstrips the value of tangible assets on corporate balance sheets. As the world becomes increasingly connected, insurers need to design future-proof policies.”
According to the firm cyber polices are the fastest growing line of insurance in the world. It said the total written premium globally today is estimated at $2.5bn (£2bn).
Citing figures from Allianz, CFC Underwriting added that the insurer estimates it will reach $20bn by 2025.
Along with “fear factor” it is thought that the General Data Protection Regulation is a likely cause for the increased uptake in cyber insurance. This regulation will impose heavy fines on companies who do not safeguard their data.
In addition, electronic computer crime was cited as the area of cover that was most likely to lead to an increase in cyber insurance claims in the UK (53%), with non-physical business interruption coming in second (25%).
Source: Judith Ugwumadu: Insurance Age