Cyber insurance to become a business essential within the next decade
Cyber insurance should become as common a purchase for UK businesses as property insurance within the next 10 years, the Association of British Insurers (ABI) said today.
Any company which uses the internet is vulnerable to dangers including deliberate attacks by thieves and data losses caused by human error, and the ABI believes cyber cover should be the norm by 2025.
Speaking today (May 5th) at the ABI’s conference on cyber insurance, Huw Evans, Director General at the ABI, said;
“Cyber risk is growing rapidly. At the moment, despite more than 80 per cent of large businesses suffering a cyber security breach in a 12 month period, only around 10 per cent have any form of cyber insurance*.
“Online breaches can cost millions, and would threaten the viability of many businesses, so the stakes are high. Cyber insurance is an increasingly important way for businesses of all sizes to manage this threat.
“The UK insurance industry is already providing cover for cyber risk to customers around the world. More British firms are now taking advantage of this expertise and by 2025 this type of cover will be seen as an essential business purchase. ”
The five key reasons cyber policies are becoming a business essential are:
- Cyber crime is one of the fastest growing forms of crime in the world. It operates across international borders and attracts organised criminal gangs.
- Cyber threats are at the cutting edge of technology. The nature of threats changes so rapidly that it’s almost impossible for individual companies to keep their defences ahead of the game.
- Businesses are increasingly dependent on IT for their everyday activities. It is not just information being stored online, companies are increasingly operating telephone and payment systems through computer-based technologies.
- Cyber attacks and failures can result in businesses closing or having to dramatically change what they do. The latest government survey on information breaches found 10% of affected organisations had to change the nature of their business as a result.
- The British insurance market is already able to offer businesses the innovative protection they need. The market in London is responsible for more than 10% of global cyber insurance business, the majority of that from the US.*
The ABI is holding a cyber insurance conference today (Tuesday 5 May), 1pm – 4.30pm, where speakers will include Mark Weil, CEO of Marsh UK & Ireland, and PwC’s Director of Cyber Security, Daljitt Barn. Journalists interested in attending should contact the press office.
Notes for Editors
*Figures from a report published by HM Government and Marsh, “UK Cyber Security: The Role of Insurance in Managing and Mitigating the Risk”.
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1. The ABI is the voice of the UK’s insurance and long-term savings industry. It has over 250 members, who together account for around 90% of premiums in the UK domestic market.
The ABI’s role is to:
– Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
– Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
– Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
– Promote the benefits of insurance to the government, regulators, policy makers and the public.
The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 25% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing around 315,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with 28% of its net premium income coming from overseas business.
Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £147 million in benefits to pensioners and long-term savers as well as £60 million in general insurance claims.
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