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Cyber Insurance: More bang for your premium buck!

The Association of British Insurers (ABI) has revealed that 99% of claims made on ABI member Cyber Insurance policies in 2018 were paid. This is one of the highest claims acceptance rates across all insurance products.

Written by Paul Brown on 18th December 2019

Cyber Insurance: More bang for your premium buck!
  • Cyber Insurance has one of the highest claims acceptance rates across all insurance products.
  • Only 11% of UK businesses are thought to have specific Cyber Insurance cover in place.
  • The worldwide premium for Cyber Insurance is estimated to be £2.8bn, but less than £100m is for UK risks.

The Association of British Insurers (ABI) has revealed that 99% of claims made on ABI member Cyber Insurance policies in 2018 were paid. This is one of the highest claims acceptance rates across all insurance products.

However, the Association warns that only 11% of businesses are thought to have specific Cyber Insurance cover in place. The take-up rate of Cyber Insurance by UK businesses remains worryingly low and the overall market size is estimated at less than a tenth of the size of the UK’s pet insurance market, meaning that millions of small businesses are exposed to uninsured risk.

The announcement comes as both AIG and Allianz have said they will no longer automatically include so-called "silent cyber” cover in other packaged policies. These insurers are expected to be followed by others in the run-up to the January reinsurance renewal season and have said they will make it clear to clients whether cyber cover is excluded at renewal.

 


One of the challenges facing UK cyber insurers is their inability to access raw breach data. The ABI has been asking the Information Commissioner’s Office (ICO) to make cyber breach data available, which would enable insurers to feed this data into their risk modelling to price the risk more accurately and to manage exposure more effectively. This would make Cyber Insurance more widely available and more accurately priced, whilst providing more bespoke cover to each business. The ICO has yet to agree, but the ABI will continue to work with the ICO to find a solution that enables both innovation and data privacy in the Cyber Insurance market.

How will Cyber Insurance protect my business?

Cyber cover provides extensive services focused on preventing a breach from occurring in the first place, as well as helping with the recovery and management of costs associated with an attack. High-profile cases of cyber breaches including British Airways and Marriott International highlight the value of this cover, which can include:

1. Cyber Forensic Support: This provides near-immediate 24/7 support from cyber specialists recommended by the insurer in the period following a hack or data breach. These specialists can assess systems, identify the source of any breach and suggest future preventative measures.

2. Cyber Extortion Cover: This protects against ransomware and other malicious attempts to seize control of operational, or personal data, until a ransom fee is paid. This clause will typically provide for a reimbursement of the ransom amount demanded by the attacker, as well as any consultant fees to oversee the negotiation.

3. Cyber Business Interruption Cover: If a cyber-attack interrupts business operations, insurance covers loss of income during the period of interruption and beyond.

4. Hacker Damage Cover: This protects against damage inflicted by a hacker on digital assets. In particular, it provides protection against the loss, corruption or alteration of data as well as the misuse of computer programmes and systems.

5. Privacy Breach Costs Cover: This protection covers costs arising from dealing with a security breach. For example, notifying customers of a cyber breach, the cost of hiring a call centre to answer customer enquiries, the cost of public relations advice, IT forensic costs and any resulting legal fees.

6. Media Liability Cover: This protects a business, in the event that its digital media presence leads to a party bringing a claim for libel, slander, defamation or the infringement of intellectual property rights. This is especially important for companies that rely on the transmission of digital data via email, a website, or a large social media presence.

Cyber Insurance is a relatively new product that is delivering real value for premium spend. The financial loss cover, the claims acceptance rates and the often overlooked forensic support demonstrate why 11% of UK businesses are buying the cover and why the other 89% should have it high on their agenda.

To obtain a Cyber Insurance quotation speak to your usual Franklands contact on 01332 545720.

Source: https://www.abi.org.uk/news/news-articles/2019/08/cyber-insurance-payout-rates-at-99-but-uptake-still-far-too-low/

 

 


See other blogs related to: Crime , Cyber liability , Fraud

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