One of the latest trends to pop up the cyber security sector is the topic of cyber insurance. Companies and entrepreneurs all over the world want to protect their businesses and data through an online insurance policy. Unfortunately, this trend has some hurdles that need to be overcome, including poor communication, incomplete data, and a lack of awareness.
Did You Know Cyber Insurance Existed?
Up until this point, just 29% of all US companies have cyber insurance. Selling these policies has become a lot harder than first assumed, due to a lack of data sharing regarding security incidents. Moreover, there is very little focus on risk mitigation for insurers or customers. These are the findings of a new Deloitte report talking about cyber insurance and how the sector is shaping up so far.
Although there is a lot of potential and money to be made for the cyber insurance sector, it remains a problem to reach new prospects and clients. Considering the total of all insurance premiums in the US adds up to $505 billion, a $3 billion industry is merely a blip on the radar. It is also true very few businesses are aware these cyber policies exist, let alone what they entail exactly.
Even the companies who do purchase cyber insurance often do so in the wrong capacity. Underinsuring the value of a company and its data is a big problem, yet it goes to show enterprises do not understand what this new tool brings to the table exactly. Most Fortune 500 companies remain blissfully unaware this type of insurance coverage exists in the first place, which is a problem that needs to be addressed first and foremost.
Explaining how a cyber insurance policy works has proven to be quite difficult. Customers can choose from stand-alone policies all they like, yet not all of them include cyber protection as most companies would like. Defining the boundaries of these new offerings needs a lot of work, as businesses will not spend money on something they may not entirely understand, let alone know they need.
What is even more disconcerting, however, is how the lack of cybersecurity data plays a big role in the underwhelming success of cyber insurance. Even though virtually every company knows they can get hacked, infected with malware, or face phishing attacks, there is no real desire to do anything about it. In fact, some companies are stockpiling bitcoin to pay off attackers, rather than actually address these threats before they can become a problem.
Insurers will need to work on creating new risk-informed models, rather than using predictive analysis. Moreover, they need to provide potential clients with a better overview of what data is at risk and what the potential effects of a hack could be. Furthermore, insurers are struggling to keep track of the growing number of cyber threats. Failing to provide coverage solutions for every type of threat is a big problem that makes these insurance policies look far less appealing.
Until buyers are well informed about what services they would receive exactly, cyber insurance will not become a big trend anytime soon. While companies want to protect their clients and data, they require custom-tailored solutions, providing insurance against virtually any type of threat. Until that becomes a reality, cyber criminals will have virtually free reign over enterprises on a global scale.
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