Cyber risks threaten insurers, even for those not offering cyber insurance

According to GlobalData, this situation — where the uptake of cyber insurance is far lower than the percentage of business owners detecting a cyber-breach — means commercial insurance providers may be exposed to cover the cost of cyber claims on traditional policies such as business interruption. (Credit: Gorodenkoff/Shutterstock)

The growth of cyber insurance is widely regarded as good news for the insurance industry. However, even insurers not offering cyber cover could find themselves being impacted financially by having to cover the cost of cyber-related claims due to ambiguous policy wording, according to GlobalData.

Daniel Pearce, insurance analyst at GlobalData, said, “The considerable growth in the uptake of cyber insurance is being driven by a combination of factors. Firms’ increased awareness about their exposure to cyber risks is playing a key role. However, this awareness is not restricted to cyber insurance policyholders. The percentage of SMEs that detected cyber breaches or attacks was greater than the percentage with cyber insurance in place across 2016–18. For example, in 2018, 40% of micro-businesses detected a cyber-breach yet only 14% had cyber insurance in place.”