Page 36 - Insurance Times Janaury 2021

well as the centre of a thriving and comprehensive few years, we have seen rapid growth followed by what we
ecosystem of cyber security service providers. "No other city all hope to be a temporary plateau. Insurers are issuing
has London's concentration of (re)insurers and brokers, co- more policies. The amounts of protection are increasing. In
located with some of the world's leading cyber security fact, our community has finally seen the first cyber
service providers spanning across InsurTech start-ups, large insurance programme to exceed $1 billion. Meanwhile, the
cyber technology vendors and specialist cyber law practice. breadth of coverage continues to expand. Cyber insurance
London is said to be well-placed to meet the growing is maturing and businesses are adapting to the new and
demand for cyber insurance and remain the pre-eminent emerging cyber security threat. Losses from incidents such
global hub. as distributed denial of service (DDoS) attacks or phishing
and ransomware campaigns account for a significant
The city is expected to serve globally as a hub for writing majority of the value of cyber claims today, unfortunately,
cyber insurance and offering associated protection services cyber attacks have become more frequent and severe.
as well as play a pivotal role in the cyber protection of UK
post pandemic landscape. Cyber Insurance global market is We've seen ransomware perpetrators become emboldened,
expected to grow at a CAGR of 27% from 4.2 Bn to 22.8 Bn with ransoms swelling from five- and six-figure price tags to
from 2017 to 2024. In India, it's at a nascent stage with 350 a reported $10 million earlier this year. Hiscox Re reports
policies sold till 2018 but with a high adoption rate of 40% insured cyber losses of $1.8 billion in 2019, up by 50% year
Y-o-Y growth from 2017 to 2018. IT/ITES and Banking & over year. Aggregate losses of that amount against
Financial Services are early adopters with newer demands estimated premiums of more than $5 billion is certainly not
from manufacturing, pharma, retail, hospitality, R&D and cause for alarm, even with the 50% growth in claims.
IP-based organizations. Caution, perhaps. Despite the rapid growth, original
insureds often don't have
enough cyber insurance - if any
at all. The "big guys" - insured
firms with protection of at least
$200 million - account for about
20% of what is believed to be
$5.5 billion in global cyber
insurance premium, according
to internal research conducted
by PCS Global Cyber.

How to Prevent

Cyber-attacks?
Today, hacking is a full-time job
and an organized crime in the
The pandemic has driven a marked acceleration in businesses cyber world. Cybercrime is not something that can be
adopting digital and cloud technologies. In the global re/ prevented but with the advent of cyber insurance, it acts
insurance industry, it's no secret that the cyber insurance as a helping hand to people in need by giving them the best
market has run into some structural issues. The entire pricing line of defense if their information is compromised. Here are
exercise - although sophisticated and effective in getting the some precautions to follow to avoid cyber threats:
market as far as it has come - hasn't been tested by a major Y Lock down your login details online, especially for social
loss event. And the lack of cyber insurance penetration would media networks and email, by using two-step
blunt the effectiveness of such a scenario. The yearly authentication.
economic cost of Cyber crime already exceeded $700billion, Y Regularly change your passwords (every 2-3 months)
but cyber insurance premiums are about $5billion. and use a password manager to securely save this
information. A strong password is at least 12 characters
At a Disastrous Stage: long.

Cyber insurance may still be in its infancy, but over the past Y Never save credit card information online.

36 The Insurance Times, January 2021