Cyber threats continue to develop at an accelerated pace, with the current trends of smart working (the new teleworking) caused by the pandemic and the digital transformation of companies. As a result, today more than ever, cybersecurity is a major concern for business executives. However, while greater emphasis is being placed on security investments against cyber-attacks, according to Watch&Act Protection Services not enough resources are being allocated to taking out a cyber-risk policy.
As our partner Javier Huergo, head of Watch&Act Protection Services, says, "the growth that was expected in this market due to the pandemic has not occurred, despite the brutal increase in claims. Industry figures show a mere 1% growth in cyber insurance business last year. In our opinion, this is because companies do not want to increase their fixed costs at the moment, but in return they are taking a big risk, as the cost of suffering a possible cyber-attack is much higher, not only because of claims and possible penalties, but also because of the economic losses caused by the interruption of activity".
Taking out cyber-risk policies is a powerful way to protect ourselves
The European Union states that the estimated annual cost of cybercrime is around 5.5 billion euros. Similarly, the cost of a cyber-attack for a Spanish SME is around 35,000 euros. For many of them, this means total closure to their customers.
What Does Cyber Liability Insurance Cover
They have policies that include civil liability coverage for damages caused to third parties in the event of data theft.
Coverage of own damages, because of a breach of security measures where the company's computer systems are affected.
Possibility of disbursements in the event of fines for infringement of data protection regulations and economic losses of the company.
Possibility of allocations of economic resources to help restore the normal operation of the company's systems and equipment.
What is the situation in terms of policy take-up?
In the last year there has been no increase in the number of Cyber-Risk Insurancecontracts , due to the high loss ratio, there has been an increase in the renewal price of existing policies, as well as a tightening of the requirements requested of policyholders.
From Huergo's point of view, "The market has become 'tougher', insurance companies are now demanding more information about the security measures that companies have in place to be able to issue a quote. Also, brokerages are making their own technological developments to be able to remotely validate the existence and functioning of these measures before offering them their policy proposal".
What type of policy is best for me? Contact us and our specialists will advise you.