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As cyber-crime continues grow, companies are recognising the need for cybercrime insurance.
The industry is reported to be worth around a staggering £7.7 billion. The demand is ever increasing as companies and authorities are finally starting to see the true impact cyber-crime can have. Entities of all shapes and sizes are being targeted by intelligent cyber criminals who have the programming skills to bring security systems down and access any number of data once thought safe.
The last couple of years have been victorious for cyber criminals as, time and time again, big name companies have been hacked and had information stolen.
Only a few weeks ago, we saw our NHS descend into panic as GP and doctors’ screens presented threatening messages demanding money for access to medical records. The incident quickly turned global and disruptions likely caused all sorts of delays and problems. In the aftermath of a hack, companies often submit public apologies and prepare themselves for legal action. On top of that, they need to salvage and upgrade their security to prevent the same thing happening again.
Now, big name insurers are offering insurance to cover costs involved in a data breach.
Cyber insurance policies could cover the costs of settling data protection claims as well as the costs associated with repairing and upgrading security systems. Allianz – one insurer offering such a product – are confident that all companies will soon see the importance of cyber insurance and want their own policies. The insurance company has predicted policies to increase by triple over the next 4 years. One of their chief underwriting officers, Hartmut Mai, proudly stated:
“…we are optimistic it can develop into Allianz’s and the industry’s next block buster. Cyber insurance is our key growth area at the moment.”
Insurer Munich Re believes the cyber insurance industry will rise from around £2.6 billion to around £11.3 billion; an increase of £7.7 billion. As cyber-crime continues on an upward climb, large companies continue to see large losses, whereas small companies see smaller losses, but sometimes at a higher frequency. The latter is probably due to lack of resources in investing in cyber-security.
Healthcare providers are also a popular target in recent years. With a wealth of sensitive data that is often required to access immediately, cyber-criminals have not held back in targeting hospitals to withhold information for a ransom. When faced with a ransom, desperate hospitals may be forced to pay unsettling amounts of money to regain access to vital records quickly. Insurance policies could help hospitals defend against, or pay for, ransom attacks; alleviating the pressure on hospital board directors to choose between saving lives and tax payer money.
In an online survey published earlier in March, a quarter of all medium-sized businesses in Germany were hit by a cyber breach and lost money because of it. The statistic is likely to be the same – if not higher – in the U.K. As with crime rates, statistics like these depend on the number of crimes reported. There are probably a whole number of companies who don’t even know if they have been breached…
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