A recent survey of risk managers (see here and here) by Towers Watson notes the following:
- 57% of respondents have ERM programs in place, just slightly improved over last year.
- 95% have at least some concern over the hardening P&C market (see chart below).
- 22% are not aware of changes in property risk modeling.
- 72% have not purchased network security/privacy liability policies.
The share not purchasing Cyber Insurance (network security, data breach, privacy, etc) is concerning. The survey was focused on larger companies, so the percentage of smaller companies not purchasing the coverage is likely higher.
The responses for not purchasing Cyber coverage were:
- 41% – their own internal IT department/controls were adequate
- 25% – they do not believe that they have a significant data exposure
Instructive was the most important factor mentioned for buying: expertise.
When respondents did purchase cyber-protection, expertise was the single-largest determinant in the purchasing decision, with 45% ranking it as number one and another 19%, number two...pricing was not the most influential factor in selecting coverage, suggesting that respondents are not simply shopping for the lowest rates, but rather are interested in comprehensive coverage and carriers that are committed to the business.
Cyber Risk coverage is not well understood, but there is more than enough information available to educate clients (see prior post here). For example, we have an approach to ease the educational challenges for retail agents and brokers, and for their customers.
eSpecialty Insurance is your specialty insurance expert. We have developed a streamlined marketplace to provide multiple proposals from a range of competitive insurers, along with expertise to help you evaluate your exposures and choose the best combination of comprehensive coverage and price. We look forward to working with you.
Great post! It amazes me how much personal information out there is unprotected!
Posted by: Doug | October 01, 2012 at 09:01 AM
Any thoughts about increases in cyber risk from internal employees internet usage?
Posted by: Paul Stevens | July 08, 2012 at 01:25 PM
Good write up, haven't heard much of cyber risk insurance but I will definitely look into it.
Posted by: Jim Dinneen | July 02, 2012 at 11:52 PM