Home > Property & Casualty > B.I. poll: cyber attacks are biggest threat facing risk managers

B.I. poll: cyber attacks are biggest threat facing risk managers

securityCyber risk tops the list of main concerns among risk managers, insurers, brokers, and risk-management consultants, according to data released by Business Insurance from a December 2013 poll. Nearly 1,000 risk management professionals responded to the publication’s survey asking about cyber security management and protection.

  • 56% said data breaches are the biggest threat to their organizations, followed by changing legislation (53%) and natural disasters (36%.)
  • Just over half (52%) currently have a cyber-risk insurance policy in place, while 38% do not and 10% were unsure.

The survey results come on the heels of several recent high-profile data breaches in the past few months at stores like Target, Michael’s Stores and Neiman Marcus, igniting further angst among companies about their exposure to cyber attacks. The BI poll revealed that cyber risk is 91% more important to organizations than it was just three years ago, making coverage more affordable as demand increases. The surge in policies has expanded beyond the U.S. as well. Insurers saw a 30% jump in sales for stand-alone policies in 2013 and are now issuing policies in over 50 countries.

Other notable findings from the survey include:

  • 30% of companies have suffered a cyber-attack but only 9% have filed a claim.
  • 60% of companies say they have developed a cyber-security program.
  • Public companies have suffered more attacks and more types of attacks, but they also have the most fully developed programs (30%).
  • 55% of respondents said that their company’s current cyber coverage meets current security/cyber protection needs.
  • Chief Information Officers and IT leaders tend to have the most overall responsibility for company security/cyber risk management (57%).
  • The five most significant barriers companies face while trying to effectively managing cyber security:
    1. Insufficient human resources monitoring cyber risks – 33%
    2. Insufficient budgets to develop and maintain security risks – 28%
    3. Complexity of security compliance requirements – 26%
    4. Lack of expert personnel to monitor risks – 25%
    5. Lack of business understanding of the role and contribution of IT – 25%

WGA’s Data Security & Privacy Liability team cautions buyers of this coverage against selecting an off-the-shelf insurance product to deal with cyber risks. The varying underwriting appetites among domestic and foreign insurers have resulted in disparate offerings of limits, coverage terms, and premiums. In the interest of breach preparedness, buyers are encouraged to partner with their insurers pre-loss in order to best coordinate how coverage will respond in the event of a breach.

For more information on WGA’s proprietary Data Security & Privacy Liability coverage offerings or claims advocacy services, please contact your WGA Client Executive or contact me at eflanagan@wgains.com.

About the Author

Ed Flanagan is an Executive Vice President in the Property & Casualty group and leader of WGA’s High Technology Practice. His responsibilities consist of negotiating complex insurance programs with a variety of clients ranging from venture-backed startup technology companies to publicly traded multinationals.

617.646.0275 | EFlanagan@wgains.com | Connect with Ed on LinkedIn
Follow Ed @ejflanagan

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