2015 was a pivotable year for cyber insurance , with a number of high profile incidents involving cyber crime and data breaches occurring around the world. This tested policy wordings and provided a perspective of how such claims will be managed by insurers.
The topic of cyber insurance is now firmly on the agenda’s of many businesses and rates high on risk registers , how this exposure is managed is very much down to the individual approach of a business and how their perceive a cyber threat would impact.
The need for cyber insurance will be determined by the risk landscape which operates in a dynamic technological environment.
Some of the factors that may influence the growth of this specialist form of insurance are likely to be the following :-
- A cyber security breach is almost inevitable and more emphasis will be placed on CEO’s and CISO’s to become responsible for data breaches and how they are able to mitigate such cyber risks within a business.
- The threat of cyber attacks to critical infrastructure , whether this be of a political or criminal nature.
- The “Internet of Things” , as electronic devices become inter connected , this increases the opportunity for cyber crime and data breaches to take place.
- Cyber security businesses will be in increasing demand as insurers will depend more and more on their expertise in the assessment and management of cyber risks.
- The increase in ransomware gangs as they utilise more sophisticated malware which businesses may fail to recognise should they not maintain the latest cyber security methodology .
- Cloud security is perceived as a larger than life threat as many businesses now rely to a certain extent on this form of developing technology for storing data. How safe this technology has not yet really been been subject to hackers focus and presents a real threat to the safeguard of data.
- Certain businesses sectors remain a high risk, such as health , finance and on-line retailers. This are the sectors where there is the highest take up of cyber insurance and it is conceivable that this will continue.
- The growing threat of cyber terrorism will remain with terrorist groups targeting government, military and critical infrastructures.
It will be fascinating to see how these factors do influence the rise of cyber insurance , in the course of events insurers will need to develop their products to respond to the evolving cyber risks that will unfold this year.