Does cyber insurance truly provide the peace of mind it implies?

Cyber Insurance industry popularity

Cyber InsuranceCyber insurance can provide important coverage against liability and data loss, but it does come with a cost and the form of coverage it provides is quite complex.

The Ponemon Institute has released the results of its second annual Cost of Cyber Crime study, which indicated that the average yearly cost of identifying and coping with cyber crime, per organization, is $5.9 million. When compared to the average figures from the 2010 study, this was an increase of 56 percent. Cyber crime costs now range from $1.5 million to $36.5 million per organization.

Insurers are increasingly offering various forms of cyber protection to help cover the costs of data breaches and other attacks from hackers. However, as of yet, they are struggling to show organizations that they provide enough peace of mind to be worth their sizeable premiums.

The PricewaterhouseCoopers Global State of Information Security Survey for 2011, which is conducted on an annual basis, included questions about cyber attack protection for the first time and found that 46 percent of the participants felt that their companies were insured against the misuse or theft of consumer records or other electronic data.

There were 12,840 participants from around the world, including presidents, directors, CEOs, CIOs, CFOs, and CSOs. Seventeen percent of them said that their organization had already submitted a claim and 13 percent said that they had received a payment for their claims. The report discussing the findings stated that while the reason that the remaining 4 percent had not received a payment was not identified, it was speculated that the claims were denied.

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