’The fallout for businesses can be particularly severe,’ warns analyst
Insurers feel that cyber will become the industry’s biggest risk in the next three years, new figures from GlobalData have revealed.
Published today (22 July 2024), the data showed that cyber has surpassed natural catastrophes and political risks as being the biggest threat to the industry.
In turn, GlobalData warned that insurers face pressure to enhance risk management and convince businesses of the need for cyber protection strategies.
Ben Carey-Evans, senior insurance analyst at GlobalData, explained there was a growing recognition of the potential exposure that insurers faced should there be a major cyber system attack or failure.
“The fallout for businesses can be particularly severe,” he said.
”Within the European Union, GDPR has resulted in large fines for businesses that fall victim to cyberattacks.
“The reputational damage on top of that is also extremely costly, as customers will not use businesses they do not trust.”
Opportunities
However, Carey-Evans explained that there were opportunities in the cyber area if insurers could find the right balance between risk and price.
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“Cyber presents a vast threat but also an opportunity for insurers,” he said.
”It is a very difficult line to price and make affordable, which increases the challenge for insurers and deters many businesses from purchasing it.
”Insurers will need to convince businesses they can protect them against the ever-increasing level of cyber threat and therefore become an essential part of their day-to-day operations.”
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