PricewaterhouseCoopers has recorded a sharp drop in the number of firms with coverage in the last year.
According to a recent PricewaterhouseCoopers survey, the number of companies in Great Britain with cyber insurance policies has plummeted. Firms have rapidly dropped the expensive coverage even as they boost their security budgets by as much as twice over. This has occurred at the same time that an array of high profile businesses experienced cyber attacks and data breaches.
PwC explained that firms hesitate to invest in cyber insurance because the coverage appears inadequate.
In the survey, many companies said that they didn’t feel cyber insurance policies would be enough to cover them in the event of an attack. This made them decide not to spend their money on the policies. They sought other strategies to protect themselves, even if those efforts turned out to be more expensive.
The PwC survey involved the participation of 479 British companies. Among them, only 38 percent said they were covered by cyber insurance. This is a massive decline when considering last year’s figure, which was 59 percent.
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PwC explained that this decline in cyber insurance policies is not entirely surprising due to the nature of the market.
PwC insurance director Domenico del Re explained, “The drop in take-up of cyber insurance shows that this is still maturing as a product.” He added, “Companies do not see the cover currently on offer as targeted to their individual risks and therefore not value for money.”
The PwC survey pointed out that the amount of coverage that could be purchased through a cyber insurance policy was too low. When compared to the size of the losses a company could experience during a genuinely catastrophic data breach, the policies barely scratch the surface.
Some very large companies including Experian, Sage Group and TalkTalk have been targeted in the United Kingdom. While trend had previously been increasing the purchase of cyber insurance policies, this is no longer the case. As businesses come to better understand the true threat of a cyber attack, many are looking in other directions to protect themselves, feeling that insurance coverage simply will not be enough.