For many years, cyber liability has been the hot opportunity for new sales. But that may be over, or at least the pace of sales seem to be slowing.
The overall upward trend of organizations purchasing cyber insurance continued in 2016, however there are signs the market is slowing after six years of rapid growth, according to a new survey, 2016 Zurich Insurance-Advisen.
The proportion of companies buying cyber insurance has increased by 85 percent, up from 35 percent of companies purchasing coverage in 2011 to 65 percent in 2016. However, the proportion of companies buying in 2016 was up only 7 percent from 2015. This compares to an 18 percent increase in 2015 over 2014.
Over the six years of this study, the cyber risk awareness of businesses outside the personal data-driven industry segment has grown, but the report’s authors note there are still some companies that believe their exposure is minimal. For example, the top reason respondents do not purchase a cyber policy is they believe their organization is not susceptible to a cyber-related loss.
Businesses within personal data-driven industries such as health care, finance and banking, retail and communications industries view cyber risk more seriously, have more robust cyber security and risk management strategies, and are more likely to purchase a security and privacy insurance, according to the survey. Some 78 percent of respondents from personal data-driven industries purchase security and privacy insurance, compared with only 59 percent from all other industries.
“The nature of data security has changed immensely in the six years we have worked on this survey with Advisen,” said Bryan Salvatore, president of Specialty Products for Zurich North America. “This year’s results continue to mark the evolving views of risk professionals, C-suite executives and boards and reveal a shifting approach to information security and cyber risk management.”
Salvatore said that industries handling personal data have developed a “good understanding” of the risks associated with potential security breaches, however there is “more work to do” to help other industries better understand the risks they face and how best to protect themselves.
The survey reflects responses from 345 U.S.-based risk managers, insurance buyers and other risk professionals covering both large and small companies.