As hack attacks continue to be a major concern for businesses, almost 80% of companies have added cyber insurance to their policies, according to new research.
Zurich North America Insurance and Advisen have released their tenth annual Advisen cyber survey of corporate risk managers and insurance buyers.
The research also showed that 55% of respondents with cyber coverage have a stand-alone policy. This represents a jump from 2011 when just 34% had some type of cyber coverage.
Looking at why they had bought a digital protection policy, the researchers found that fear of ransomware attacks was a key driver behind it.
Of the businesses polled, 43% said that businesses interruption was seen as the worst outcome of a ransomware attack. The second biggest worry was the fear of reputational harm, which 29% were worried about.
Moreover, 15% were worried about loss of data and 11% said the same about loss of funds or being forced to pay off the people behind the attack.
Encouragingly, 60% of respondents feel either extremely prepared or prepared to respond to a ransomware event, while 33% feel somewhat prepared.
Looking at training, the researchers found out that 35% of respondents provide annual training for employees on cyber risks, while 24% conduct quarterly trainings. Similarly, 30% of respondents only assess their company’s exposure to cyber risks on an annual basis, indicating potential gaps in security.
Looking at the impact of the global pandemic, 81% said that their cybersecurity spend had remained unchanged despite financial constraints due to Covid-19.
“Unprecedented change in the world requires us to think differently and act with agility,” said Michelle Chia, head of professional liability and cyber for Zurich North America. “This survey reveals that customer expectations are changing as their level sophistication about cyber risks have grown.
“Risk managers increasingly are connecting the dots between high-profile cyberattacks, business interruption, and reputational risk – and they’re looking for coverage that protects their business at the right price.”
Firms with between $1bn and $10bn in revenue comprised 30% of the respondents to the survey, whereas large businesses with more than $10bn in revenue represented 16%.
The majority of respondents came from smaller and middle market companies with less than $1bn in revenue. They represented 54% of the respondents.
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