Attacks Expected to Continue to Drive Cyber Insurance Market
The frequency and severity of cyber-attacks have caused devastating effects on enterprises in recent years. While there has been potential threat from data breaches for decades, businesses are now starting to realize the long term consequences of these attacks. With more motives to shift liability, the Cyber Insurance Market continues to flourish.
According to ABI Research, the market is said to increase to $10 billion by 2020 due to the inherent risks. The same study found that over 900 million recorded breaches occurred in 2014, creating a dire need to confront the issue.
However, only 20 percent of large businesses have cyber insurance and the figures are even less for small to medium sized enterprises at an estimated 6 percent. So, why the lack of coverage?
Claims Journal states that the largest growth barrier lies in the lack of data on damages resulting from these attacks. Because there isn’t much hard evidence on the actual financial loss of breaches, insurance agents are struggling to assign proper values to systems and data. In turn, they are unable to accurately gage the scope of cyber risk and create relative policies to protect against those claims.
Michela Menting, research director of ABI Research, stated “More information sharing and understanding of event impact and the associated longer-term costs (through post-incident analytics, for example) can help remove some of these obstacles. In turn this will drive better policy rates and see the cyber insurance market progressively emerge from its niche, despite being around for over 30 years.”
These risks are still being evaluated by researchers in order to ensure companies can obtain coverage to properly protect their agencies in the event of a cyber-attack.
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