There is a belief that the cyber-insurance market could see a dramatic rise following the recent worldwide cyber-attack.
Figures from insurer Munich Re suggest that the market for cyber protection could triple by 2020, to a value of around £7.7bn ($10bn).
One of the big factors driving concerns is the new EU legislation requiring companies to report breaches of cyber-security to affected individuals and relevant regulators.
The legislation is called the Network and Information Security Directive and will be introduced in 2018.
The new law will require “operators of essential services in the energy, transport, banking and healthcare sectors, and providers of key digital services like search engines and cloud computing, to take appropriate security measures and report incidents to the national authorities.”
The advent of this legislation has led to insurance firms such as Allianz offering cyber-protection policies, with the belief that this is one of the most promising markets.
“We are optimistic that it can develop into Allianz’s and the industry’s next blockbuster,” Hartmut Mai, chief underwriting officer for corporate lines at Allianz’s industrial insurance arm, told Bloomberg. “Cyber insurance is our key growth area at the moment.”
The rising need for cyber-insurance should come as great relief to a struggling insurance industry, which has stagnated in Europe over the last year.
Allianz’s Mai reportedly said that his firm “currently writes a double-digit million-euro amount of cyber insurance premiums and recorded 28 percent growth last year.” He also predicted that cyber insurance policies could evolve into an industry bestseller.
Paul Bantick, head of cyber insurance at Beazley, was reported as saying: “cyber risk has become a boardroom issue over the past years, following some high-profile hacker attacks, we haven’t seen the big breaches at the retailers such as in 2015 or the large health-care breaches that occurred in 2016. Yet, there’s still a high frequency of smaller losses.”
It was revealed this year, under a Freedom of Information request, that 87 NHS Trusts in the UK had been targeted in the last 18 months.
Research conduct last year by IBM found that 70 per cent of business infected with ransomware paid the fees to regain access, with over half of these spending in excess of £8,000, and 1 in 5 businesses paying over £32,000.