The number of filings insurers are receiving across Europe has seen a sharp increase.
European insurers are receiving a much higher number of claims on cyber insurance policies, reflecting an increase in malicious digital attacks.
Organizations are increasingly digitized and are facing growing vulnerability to attacks.
This new cyber insurance policies data was a part of the findings from Marsh, Wavestone, and CMS law firm research. It involved an analysis on claims data managed by Marsh across the EU. The data showed that the claims growth rate over the last year was over 80 percent. The spike in claims is being linked to the rising reliance of businesses on digital channels such as artificial intelligence, cloud technology and then internet of things, as well as others. This trend has increased the nature and size of risks of being targeted in cyberattacks.
Over recent years, businesses have become more than aware of the risks they face. This understanding has been demonstrated by the substantial growth in cyber coverage popularity throughout Europe. The report stated that the rise in both coverage and claims indicates that this market is maturing.
Businesses no longer consider cyber insurance policies to be optional as the threat of cyberattack looms.
“Cyber insurance has been seen more and more as a reliable and cost-effective way to transfer the financial risks that companies face from the increasing use of data and technology in business operations. These include losses and expenses associated with a growing range of cyber perils, such as malicious attack, privacy breach, and accidental events,” said the authors of the report.
Sjaak Schouteren, cyber development leader at Marsh Continental Europe, underscored the broad spectrum of benefits offered by this type of business coverage. “Increasingly, firms are looking to standalone cyber insurance as part of their robust cyber risk mitigation programme. These policies can help mitigate the severity of an incident, reduce the organisational impact, and boost resilience against cyber threats.”
Equally, the report points out that cyber insurance policies on their own are not a complete protection strategy. It recommends that businesses also invest in a solid digital security framework to complement their coverage. This can reduce the intensity and frequency of potentially disastrous attacks while still covering those that do occur.