More than a third of businesses we surveyed (36%) plan to invest in cyber security this year, this represents a sharp decrease from last year (46%). What is alarming is that cyber risk is not diminishing and the widening gulf between how the threat is perceived and the reality is stark.
It is incumbent on insurers and brokers to highlight the threat to clients and continue to highlight the positive impact of a defence in depth security strategy, to ensure firms do not become desensitised to cyber risk and expose themselves to ever more effective cyber criminals.
In recent years, the value of cyber insurance has been proven beyond doubt. The insurance industry has been called upon to respond to an avalanche of incidents and paid out billions in ransomware claims alone1. That is what we are here to do.
However, for the cyber insurance market to grow, it must recognise that certain risks are too big to cover, and that their impact is of sufficient scale to be considered systemic and catastrophic. These risks are few, but they do exist. Cyber warfare is one such risk. The potential losses are only increasing. As the wording of war exclusions evolves to reflect the reality on the ground, then a new cyber war market is evolving to furnish demand.
The evolution of technology is making more and more businesses feel exposed. Insurers must continue to support businesses as they embrace new innovations, jolting them from their reverie when they believe a clear threat has dissipated and working to create new solutions as risks compound and their potential impact grows. These are uncertain times for many businesses and insurance must work harder to provide greater security.