The insurance market minimizing customers’ losses in the event of a cyberattack is still tiny despite an increasing number of threats. But experts believe the situation is going to change drastically fairly soon.The European market for cyber-insurance had been slower to develop than generally anticipated, Axel Theiss of Germany’s Allianz told Reuters on Friday. Theiss is a board member responsible for global property and casualty insurance.
He said the Continent’s cyber-insurance currently had a premium volume of around 200 million euros ($224 million), with Allianz’s cut of the European market just about 50 million euros.
“I had thought that this market would grow more quickly and more aggressively than it has, but now it’s really picking up,” Theiss said, pointing to the recent WannaCry ransomware attack that highlighted risks to businesses around the world.
A typical cyber insurance policy can protect companies against extortion in such ransomware attacks, covering both investigation costs and ransom payments.
“In the coming years, the market could easily grow worldwide to 20 or even 40 billion euros,” Theiss said. “The more customers we have, the greater the coverage levels we can offer.”
No easy decision?
But financial professionals are caught between a rock and a hard place on cyber-insurance, knowing that premiums are not cheap and that sometimes coverage isn’t far from being adequate.
Threats of the magnitude seen in recent years can easily cost a company more than twice of what a cyber-insurance police would cover.
Security experts have warned that many firms have not yet taken a suitable risk management approach while underestimating the dangers lurking in the digital world.
Many argue that it makes more sense to invest heavily in cyber insurance rather than pumping more and more money into preventative technology that ultimately won’t keep the bad guys out.
hg/jd (Reuters, AFP)