Top insurer sees spike in cyber business

One of the world’s largest insurance companies is seeing a marked uptick in the sale of coverage for cyber attacks, its top executive said Tuesday.

Lloyd’s of London CEO Inga Beale called cyber risk “the most serious threat to businesses and national economies” in an interview with The Telegraph.

{mosads}“It’s an issue that’s not going to go away,” she said.

Experts have predicted growth in the cybersecurity insurance business for several years, as hackers around the world become more sophisticated.

Data breaches in the headlines also put businesses on edge, leading them to seek security in insurance coverage.

Geoff White, cyber underwriting manager at Lloyd’s syndicate Barbican, said the number of insurance submissions in the cyber market rose by 50 percent in the first three months of the year compared with the same period in 2014.

Approximately 70 percent of the practice’s customers are first-time purchasers, he said.

“In general terms, we’re continuing to see new customers purchasing cyber insurance and existing customers purchasing higher limits following recent high profile attacks,” White said.

“We’re also seeing customers in those sectors which were affected last year, and in particular in the retail sector, looking to buy higher limits.”

The National Association of Insurance Commissioners (NAIC) noted that most commercial policies do not cover cyber attacks.

“To cover these unique cyber risks through insurance requires the purchase of a special cyber liability policy,” the NAIC’s Center for Insurance Policy and Research wrote in a brief posted online.

“However, cyber risk remains difficult for insurance underwriters to quantify due in large part to a lack of actuarial data. Insurers compensate by relying on qualitative assessments of an applicant’s risk management procedures and risk culture.”