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BizReport : Law & Regulation : March 31, 2016

Decrease in data breaches leads to drop in cyber insurance cost

Cyber insurance rates have fallen thanks to a lull in high-profile data breaches, according to insurance industry brokers.

by Helen Leggatt

Following a spate of high profile cyber attacks on companies such as Target and Home Depot, insurance costs spiked for many firms last year, reports Reuters. Those breaches led to big payouts - including $90 million for Target and $100 million for Home Depot.

However, during the first quarter of 2015, insurers have cut cyber insurance rates thanks to a lull in such high profile data breaches.

According to insurance broker Marsh, of Marsh & McLennan Cos Inc., the cost of $1 million in cyber insurance fell 13% in Q1 2016 to $18,756 after last year's rise of 28% to $21,642.

Research by Marsh in the UK last year found that just 11.1% of U.K. companies have cyber insurance with 38.9% saying they intend to get quotes within the next 12 months. However, almost half (47.2%) say they have no plans to acquire cyber insurance and a similar number (48.6%) believe they do not have adequate information to be able to assess insurances that are available.

Almost a quarter (22.2%) of businesses surveyed admitted to having no response plan in place should a cyber attack occur and 26.4% have only a partial plan in place. Board-level ownership of cyber risks was also low at 19.4% among U.K. businesses, showing little change from the 20% of 2014.

Image via Shutterstock

Tags: cyber crime, cyber security, insurance, risk

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