More European Companies Seek Cyber Insurance
European insurers report that the increasing incidents of cybercrime is sparking company executives’ interest in insurance policies that cover the fallout from hacking, according to the
Wall Street Journal
Cyber risk experts quoted by the paper include Jens Krickhahn, practice leader – cyber and fidelity at German insurer Allianz, who says that demand for the protection provided by the group’s cover is rising and the number of deals “has increased significantly.” Allianz launched the product in 2013 and its cyber policies typically cover the costs of investigations, customer notifications and credit-monitoring services, as well as legal expenses and damages from consumer lawsuits.
Krickhahn told the
that damages from breaches are generally higher in the US than in Europe as credit cards are more frequently used and court rulings on data protection are stricter.
The US therefore remains the main market for cyber policies. The European market, while growing, is still at an early stage and several years behind developments in the US. Sales of such contracts are still limited, despite rising awareness of the risks among customers.
“There are only a small number of cyber insurance contracts we know of,” Oliver Dobner, a member of the executive board at insurance broker Marsh’s German operations, told the business daily.
He added that the limited number of buyers can choose between a range of vendors. Most major corporate insurance firms offer cyber coverage, including Zurich Insurance Group, Lloyd’s of London, Hiscox and HDI-Gerling.
“Cyber risks are very complex,” said Krickhahn. “Different stakeholders such as IT security architects and business continuity managers need to share their knowledge to identify and evaluate threat scenarios.
“Previously siloed knowledge needs to be incorporated in one ‘think tank’ which can look at risks holistically. The ‘human factor’ should also not be underestimated, as employees can cause IT security incidents, inadvertently and deliberately.”