As digital attacks and data breaches spread like wildfire, European companies are aiming to protect themselves.
New legislation in the European Union with regards to data privacy is giving a considerable shot in the arm to the cyber insurance industry, say specialists in that market, particularly following some very high profile attacks on companies such as Experian and TalkTalk earlier in 2015.
Last week, the E.U. agreed that its data protection laws needed to be changed from their previously fragmented state.
The new laws will require companies to report data breaches that are likely to cause harm to individuals. These reports need to be made within 72 hours of having noticed the attacks and must be made to national authorities. This requirement to announce data breaches is likely to lead companies to turn to cyber insurance companies in order to help to cover the costs associated with being unable to keep the attacks a secret.
Cyber insurance will probably be a main protection level now that data breaches can’t be swept under the rug.
While European companies were not required to report data breaches, there wasn’t all that much need for cyber liability insurance because they were able to hide most of these events from the public. However, in anticipation of the implementation of the new law in the E.U., there has already been an increase in demand for this type of insurance policy, said Beazley’s technology media and business services U.K. focus group leader, Paul Bantick.
Bantick pointed out that “We have seen clients buying policies because they know that this is coming,” and that “Breaches are going to get more expensive, they are going to get more complex and they (clients) want insurers to help with both of those issues.”
Experts are now looking to the trends that were seen in the American cyber insurance market’s development as an indicator of the direction that might be taken in the European market. In the E.U., there are already some major players that are taking part in the cyber liability business, including Munich Re’s Ergo, as well as Zurich, Axa and Hiscox.