Report: Spending on Cyber Insurance on the Rise
A new report, “Benchmarking Trends: Cyber Attacks Drive Purchases for New and Existing Buyers”, from insurance broker Marsh, shows its U.S. clients are spending more on stand-alone cyber insurance – up 32% for the first half of 2015. Businesses are increasing their investment in Cyber insurance, cites the report, as a greater number of high-profile data breaches are identified and make news.
Which industries have stepped up and increased their investment in Cyber Liability? The Marsh report shows that power and utility companies increased their growth rate 100%, nearly doubling their take-up rates for the same period in 2014. Universities and other education-based institutions saw a growth rate of 155% – a 90% change in their Cyber insurance spend over the previous year.
In addition, on the heels of the Anthem attack, healthcare organizations have increased their Cyber purchases, up by 41% in 2015 from 37% at the end of the first half of 2014. As we have discussed on numerous occasions and in our previous blog, healthcare organizations are prime targets of cyber criminals because of the wealth of private health information and identify information providers and payers store in their systems. Moreover, shared system data exposures and the threat of false claim submissions are among the reasons this group has upped its Cyber insurance purchases, says the report.
The hospitality and gaming industries as well as the financial sectors experienced a 5-8% increase in cyber purchases for the first half of 2015, too.
The reasons behind purchasing Cyber insurance varied, according to the Marsh report, and included filling gaps in traditional coverage, lessening financial harm, mitigating reputational damage, and covering costs associated with class-action lawsuits.
Purchasing higher Cyber Liability limits is also on the rise, cites the report. For example, communications, media, and technology (CMT) companies with revenue exceeding $1 billion purchased almost 50% more Cyber insurance limits on average in the first half of 2015, at $55.8 million, compared to $38 million in the first half of 2014.
Businesses are also becoming more proactive in their risk management strategies in the wake of high-profile cyber breaches. Corporate leaders are beginning to realize that it is no longer just an IT problem, says the report, and that the most effective programs are implemented enterprise-wide. It’s imperative that organizations assess their vulnerabilities, determine how they would respond in an actual cyber breach, and be proactive in preparing for this eventuality.
Caitlin Morgan specializes in providing Cyber Liability insurance for a broad spectrum of industries, including healthcare and educational institutions. We can help you meet the growing demand and need for a robust and tailored Cyber Liability insurance solution. Just give us a call at 877.226.1027.