Cyber insurance market to hit £6.5 billion in five years

Continued and sustained high-profile cyber attacks are having a ruinous effect on enterprises and driving up the cost of incident response.

With over 900 million reported records exposed in 2014, more companies are seriously starting to consider transferring risks to insurance providers.

Despite growing awareness of vulnerability to breaches and risk management strategies however, less than 20 per cent of large enterprises avail themselves of cyber insurance. For small and medium-sized enterprises (SMEs), the percentage is even lower, standing at less than 6 per cent according to ABI Research.

The largest barrier to growth is lack of actuarial data about cyber attacks, but this is quickly changing with continued cyber assaults. Currently, insurers are finding it difficult to assign the proper value to data or systems, or to determine appropriate policies since they are unable to scope the cyber risk environment of an organisation.

There is also some debate as to whether cyber insurance will be enough to hold back hackers but the UK government is taking positive steps to improve cyber protection for businesses by launching joint initiatives with the insurance sector.

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