Cyber insurance continues to be an issue for the insurance industry
Cyber insurance has been around since the 1990’s, but the insurance industry has only recently begun to place more focus on digital threats. Following major attacks against companies like Home Depot, Target, and Sony Pictures, the insurance industry has been working to introduce better cyber insurance products. Better protection may be needed for businesses that could be targeted by malicious groups, as cyber attacks could cause major financial damage that can be very difficult to recover from.
Adequately pricing cyber protection is becoming more important
Some industry analysts have expressed concern that cyber insurance policies may not be adequately priced. Given the financial damage that such attacks can cause, insurers may be exposing themselves to significant losses if they do not form a better understanding on how to price their policies. Many cyber insurance policies come with limitations, which mitigates the losses that insurers can see when faced with a cyber attack. Currently, such limitations seem to be working in the industry’s favor.
Cyber attack against Sony Pictures causes approximately $100 million in damage
The recent cyber attack against Sony Pictures caused an estimated $100 million in damages, which came from personal information of employees and clients being stolen, the pirating of videos that had not yet been released, and other compromised data. The cost also includes the replacement and repair of computer systems that were affected by the cyber attack, as well as the bolstering of security measures that are needed to thwart future attacks against the company.
Cyber attacks may become more common in the coming years
Security experts have been keen to warn that cyber attacks are likely to become more common. If the insurance industry does not work to develop policies that are more capable of handling these attacks, insurers and other businesses could begin to see massive losses in the coming years. According to the U.S. Federal Bureau of Investigation, 90% of corporations in America have been struck by a cyber attack that is similar to that carried out against Sony Pictures.
One Thought to “Insurance industry may need a better understanding of cyber insurance”
Due to the large scale data breaches nowadays, the demand for cyber insurance has grown. Only a small number of providers offer this type of insurance and coverage varies widely. Depending on the policy, cyber insurance can offer coverage for things such as credit monitoring, media liability, business interruption and crisis management.