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Distrust Of Insurers Leaves Business Vulnerable To Cyber Crime

Posted on May 4, 2015 at 8:00 AM

This is really quite sad. 

There have been new insurance products launched to protect business from suffering losses due to cyber attacks - but the insurance industry doesn't appear to be the most trusted.

The most common reason for not purchasing a cyber insurance policy is the belief that insurers will not actually pay out on a claim, according to a survey of senior information security professionals, whose organisations are members of KPMG’s International Information Integrity Institute. 

A staggering 74% of those surveyed stated their businesses had no cyber insurance in place. This is despite 79% believing that cyber security threats are likely to increase over the next twelve months, with three quarters (74%) perceiving organised crime and state sponsored activity to pose the biggest threat. For those whose businesses have purchased cyber insurance, 48% think that the policies may not pay out if they need it, says KPMG.

Mark Waghorne, KPMG

Mark Waghorne, Head of KPMG’s International Information Integrity Institute, says: “It is worrying to see that so many businesses would rather risk having no insurance in place to protect themselves against a threat they believe is very real. It is also disappointing that cyber insurance is viewed as providing little comfort to those who have it, as almost half don’t believe they would be compensated properly if push came to shove."

"Of the information security professionals we spoke to, 30% believed the market for cyber insurance does not appear to be sufficiently mature yet. Insurers will need to deliver more comprehensive packages in order to convince the business community that they can and will protect against losses on cybercrime" he adds.

However, KPMG suggests that that the availability of specialist, focussed cyber related insurance has much improved during the past year with clear evidence that carriers do pay out.

It is an indication perhaps that  those organisations which have avoided cyber insurance in the past should perhaps revisit their positions.

It is also another damning indictment on the lack of trust in the financial services industry.

Categories: Governance, Technology, Communication