Insurer group says only 11% of U.K. businesses have cyber policies.
- September 2019
While 99% of cyber insurance claims made to its member companies in 2018 were paid, the Association of British Insurers said, the take-up rate of such cover is “still worryingly low.”
Only 11% of U.K. businesses are believed to have cyber policies, the ABI said.
The percentage of honored claims, the ABI said in a statement, is one of the highest involving any insurance policy. A total of 207 cyber claims were made during the year, the ABI said.
The U.K. cyber market, the ABI said, is less than a tenth of the size of the pet insurance sector. The low level of cover, the association suggested, represents a particular problem for small businesses.
According to the ABI, the lack of available information about data breaches is limiting the growth of the U.K. cyber insurance market. “The U.K, has the potential to be a world leader in cyber insurance,” the association said in a statement.
The ABI said it has been seeking information from the Information Commissioner's Office to provide the public with anonymized data on breaches. Such a move, the ABI said, would make the pricing of risk easier by making modeling more efficient. The result, the ABI said, would be the increased availability, and tailoring, of cover.
James Dalton, the ABI's director of general, or nonlife, insurance policy, said the added support cyber customers get from their insurers is sometimes overlooked as an advantage of a cyber policy.
Cyber insurance, the ABI said, can help take the step to prevent a hacking attack and manage the costs when an incident does occur. The association cited recent attacks on British Airways and the Marriott hotel group.
“Data is key to insurers' ability to better understand and more accurately price cyber risk,” Dalton said in a statement. “We need the [Information Commissioner's Office] to work with us to find what data can be shared to help insurers provide more cover to the many businesses that need it in this digital age.”
In July 2019, Lloyd's announced that it will require contract certainty for cyber contracts from the beginning of 2020. This will mean, Lloyd's explained, a policy will either have to exclude cyber coverage or to offer it through the reinsurance policy. “Lloyd's view is that it is in the best interests of customers, brokers and syndicates for all policies to be clear on whether coverage is provided for losses caused by a cyber event,” Lloyd's said in a statement.