The government is encouraging businesses to better mitigate their risks through this type of policy.
The government of the United Kingdom is seeking to increase the adoption of cyber insurance as a method of bettering the way that organizations within the country are able to manage the risks associated with issues such as data breaches.
Companies of all size and security protection are experiencing data breaches and cyber attacks at a growing rate.
At a summit that was hosted with a number of CEOs from the cyber insurance industry, the Minister for the Cabinet Office, Francis Maude, said that the government is hoping that businesses will buy this coverage in greater numbers. Maude explained that, building on the National Cyber Security Programme (NCSP), the government and insurance industry would be working together to look into the various ways in which this protection could be used in order to model the way that the industry responds to cyber attack events, to encourage best practice, and to create a more attractive environment within the U.K. for companies to securely do business.
The idea is that the greater availability of cyber insurance could build higher security standards.
It was explained that as these insurance companies become more widespread in terms of both availability and adoption, higher security standards will be created by design, over time, and will help in offsetting the considerable spike in threats that are especially faced by smaller companies.
Maude explained that “We want to support the growth of a cyber insurance market in the UK so we are very pleased to come together with the UK’s world-renowned insurance sector.” That said, the Minister also pointed out that this coverage “replace the need for good cyber security practice but is an added protection for businesses in the event of breaches.”
This will be a tremendously meaningful development within this sector of the insurance industry, which remains quite a small market, so far, not only in the United Kingdom, but worldwide. The coverage has a tendency to be expensive, greatly defined, and is challenging to price because the risk is hard to measure. Insurers simply do not yet have enough data for accurate premiums calculation models because the coverage is relatively new and uncommon, so far.