Buyers need stronger cyber insurance offerings

Risk managers are calling on the insurance industry to improve its current cyber offering.

This is according to a survey unveiled at today’s Airmic conference, where cyber and IT-related risks emerged as one of the top concerns among risk managers.

The survey revealed just 33% of risk managers are confident that the main cyber-risks have been identified and quantified, while 58% would like insurers to provide services in response to data breaches.

The focus is also on securing data breaches in the case of interruptions to business, with 48% calling on insurers to do more in this area.

Airmic technical director and deputy chief executive Julia Graham said the findings underlined the message that insurers and their buyers need to adapt to the fast-changing business environment.

She added: “Intangible risks dominate the concerns of our members, and are much less well accommodated by the insurance industry than tangible risks. This is something that underwriters and insureds need to develop further as a matter of urgency.”

Insurance favoured

Cyber-risk was ranked among the top three concerns by 39% of respondents, second only to reputation at 41%. However, when they were asked the likely position in three years’ time, cyber moved to the top spot, cited by 43%.

The survey showed transferring risk through insurance is favoured for a number of risks whose origins sit outside the direct control of the company, and which are therefore harder to mitigate directly. This includes natural catastrophe (68%) and terrorist attack (63%).

Cyber-events, both those causing business interruption (49%) and loss of data (45%), are also singled out for transfer.