Crawford releases report showing that the frequency and complexity of cyber insurance claims is on the rise
A new report from Crawford & Co. shows that the cyber insurance market is becoming increasingly complex. The frequency and complexity of claims is one of the primary challenges facing this market currently. Insurers are typically well suited to address the potential risks that exist in any given market, but the advent of technology has changed many things in the world. The insurance industry has not yet had enough time to fully understand digital risks and how to address them effectively.
The average business in the UK suffers from 70 new malware attacks every day
The report notes that in the United Kingdom alone, the average company is falling prey to 70 new malware infections on a daily basis. As more businesses become aware of digital threats, the demand for cyber insurance is beginning to rise. The problem, however, is that policies that address the full spectrum of cyber attacks and other issues are scarce. The lack of policies that are able to protect businesses has left the insurance market somewhat lacking.
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The insurance industry has a lot of growing up to do in the digital space
The report suggests that the insurance industry, as a whole, is in a sort of “infancy stage” in its response to digital threats. Insurance companies are still trying to figure out how to gauge the risks of the digital world and what impact these risks can have on the physical world. For businesses, these risks are somewhat clear, in that they involve financial damage and a souring reputation with consumers. How insurers can mitigate this damage, however, is a more complex issue.
Cyber attacks are unpredictable, making it difficult for insurers to gauge risks and respond accordingly
One of the reasons cyber attacks are not well understood by the insurance industry has to do with their ever evolving nature. These attacks are very similar to natural disasters in their unpredictability. Natural disaster can be predicted to some degree, however, based on various climatic patterns. Cyber attacks cannot be predicted because they are often directed by human action, which can be much more spontaneous than weather.