Cyber insurance may sound alien or strange, you won’t be the only one having such a view. You may even frown at anybody who suggests that you go for cyber insurance and you will be right.
Insurance policies are, however, not strange to businesses but going for cyber insurance sounds as if we are taking the game too far. But then, you have never thought even in your wildest dreams that you will get to a situation where the fear of cyber threats is the beginning of business wisdom.
Even where you want to believe there is no need for cyber insurance, the evidence on the ground completely contradicts any such notion you may be having. Cyber attacks are not in any way relenting and cybercriminals are becoming more sophisticated and tech-savvier
Jeremiah Grossman, founder of WhiteHat Security and organizer of the cyber insurance micro summit Black Hat 2019, said he believes cyber insurance will have “a profound impact on every single one of us, in every single thing that we do in this industry.” This is definitely the reason why the cyber insurance market has experienced a boom in recent years.
The bitter truth is that despite the boom experienced in cyber insurance adoption, only 38% of the companies polled in the US and Europe have active cyber insurance policies in place. And the more interesting aspect is that out of those insured organizations, 45% purchased cyber cover in the past two years, 32% purchased their policy three to four years ago, and only 24% have been covered for more than five years, according to the study carried out by IT industry networking organisation Spiceworks.
Zion Market Research, however, sees cyber insurance growth of an estimated USD 22.8 billion globally by 2024. This is good news for operators of the policy.
With the current spate of attacks and security breaches, you don’t need to be prodded. An insurance policy will go a long way in giving you the much-desired peace of mind in the unfortunate event of an attack.
What are the driving forces behind cyber insurance adoption?
“We have carried cyber insurance for about 5 or 6 years now,” Spiceworks Community member Bill Mack, said. He also went ahead to add: “Why? Because as I told the owners: I have to be right 100% of the time to prevent a breach. The hackers only have to be right once to take it all away.”
What you make out of this is that organizations make security a top driving factor for a cyber insurance policy. Among organizations with a cyber insurance policy, 71 percent cite precautionary measures as a reason they purchased a policy.
The report went on to say that 44 percent cited increased priority on cybersecurity, handling a lot of personal data 39 percent on handling a lot of personal data, and industry-specific regulations, 28 percent gave decision-making process as their reason.
What came as a surprise anyway was that only 14 percent of organizations purchased coverage due to customer requirements, While 14 percent also said they bought coverage as a result of new data protection regulations, such as GDPR.
Whatever 71 percent of organizations surveyed believe in and have adopted can never be outrightly wrong. If you don’t find a cause to join in, you may be doing yourself and your brand a great deal of harm.
It may surprise you to learn that organizations that don’t have the insurance policy are not doing it because they don’t want, rather it’s because they don’t know as some 36% of IT professionals said their organizations did not have any cyber insurance policy because they are not aware of its existence. Though you may come across organizations that are not bothered, however, you may not be able to bear the consequences of the aftermath.
Have you ever paused to think about the cost of cyberattacks?
Cyberattacks can be very devastating depending on your financial strength. The insurance industry-backed Cyber Risk Management (CyRiM) project report gave a warning about a hypothetical coordinated global cyberattack that is spread through emails, saying that it could have an economic impact of between $85bn and $193bn.
Despite this huge costs to businesses, the report pointed out that the global economy was ill-prepared for such an attack, with a whopping 86% of the total economic losses uninsured, this translates to an insurance gap of $166bn. To show that a lot of organizations are losing out on the cyber insurance policy according to the report, the total claims paid by the insurance industry for attacks should be between $10bn and $27bn.
If we have to a bit of juxtaposing, it’s glaring that insurance industry losses are just between 9% and 14% of the total economic loss, which goes to show that this type of cyberattack has been greatly under-insured. An extrapolation will show that it’s about the same thing for all other forms of cyberattacks.
You can’t afford to wait until you are attacked, the right time should be yesterday but you can still get you cyber insurance policy today.