Cyber attacks estimated to cost businesses as much as $500 billion a year in damages
The cyber insurance market is poised to see massive growth in the coming years. Cyber crime has become a very profitable business, with companies that have been hit by data breaches and other attacks reporting major financial losses. According to a recent report from Cybersecurity Ventures, cyber attacks cost businesses an estimated $400 billion every year, though other estimations suggest that the damage is closer to $500 billion a year.
Cyber insurance market set to reach $7.5 billion by 2020
A report from PricewaterhouseCoopers predicts that the cyber insurance market will reach $7.5 billion in yearly premiums by the end of 2020. Premiums collected are expected to reach $5 billion by 2018. A growing number of businesses are beginning to purchase cyber insurance protection in order to protect themselves from the digital threats they are facing. These threats are becoming more common and cyber attacks are growing more sophisticated. As such, cyber insurance is becoming more attractive and a viable way to protect a business.
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Some businesses are questioning the value of cyber insurance due to policy restrictions
While cyber insurance is becoming more popular, a growing number of policyholders are beginning to question the actual value of their coverage. For many policies, insurers have imposed limits and strict terms and conditions that govern what these policies cover. At the same time, these policies are also quite costly. Insurers may be relying too much on tight blanket policy restriction and pricing strategies and may miss out on financial opportunities in the coming years.
Businesses are seeing cyber attacks as major threats
According to the report from PricewaterhouseCoopers, there were an average of 100,000 security incidents per day throughout the world in 2014. The report has found that 61% of business leaders see cyber attacks as a major threat. Purchasing cyber insurance coverage could serve as an adequate safety net for companies that may be exposed to cyber attacks. Companies will also have to take adequate measures to protect themselves from digital attacks as well, as insurance coverage is not the only form of protection that is available.