A survey of cyber insurance representatives across the UK and Ireland believe just half (50pc) of clients have cyber insurance – despite the average cyber attack costing almost £90,000.
The research, based on 400 people from cyber insurance broker and carrier companies worldwide, explores the state of the cyber insurance market within the current threat landscape. It finds most, 70 per cent of UK and Ireland brokers expect the number of new claims against insurance policies to rise over the next year, while most, 68pc are predicting premium rates to rise in the same period.
Insurers globally say AI, large language models (LLMs), and data privacy are the primary causes of more sophisticated attacks. Ransomware is the most frequent type of claim worldwide, with on average, 18pc of respondents suggesting their clients have experienced an attack in the last 12 months. That’s followed by data breaches, theft of funds and phishing incidents. These are having a significant financial impact, with the average claim totalling £87,000 ($115,000) and rising to £633,641 ($812,360) for large businesses.
Brokers in the UK and Ireland are more likely to partner with cybersecurity providers than the global average, while almost a quarter (23pc) have negotiated pre-arranged insurance benefits for clients with some cyber risk management vendors. Arctic Wolf, which arranged the study, sees there an increasingly active role in mitigating risk, with many also working alongside incident response specialists to help prevent breaches and reduce the likelihood of insurance claims.
Kevin Kiser, Senior Director of Strategy, Insurance Alliances at Arctic Wolf said: “As threat tactics evolve, cyber insurance is no longer a ‘nice to have’ but a strategic pillar of modern risk management. While the insurance industry is working with clients to improve protection, attacks are ultimately costing businesses hundreds of thousands of pounds worth of damage. Building on this momentum will therefore be critical to businesses not just staying protected, but fully operational in the months and years ahead.”
DSIT report
The Department for Science, Innovation and Technology (DSIT) has brought out a study of small and medium sized enterprises’ (SMEs) perceptions of cyber insurance. The report by the audit firm Grant Thornton found that many SMEs have minimal cyber security budgets and potentially face severe financial impacts, such as lost revenue and extended recovery times, if they suffer a cyber attack; and complex policy language means that many SMEs struggle with understanding policy details; the report described the cyber insurance market as ‘dynamic and fragmented’.
Cost
Average cost of a policy of £11,500 would be focused on business interruption and crisis management. For more extensive coverage including business interruption insurance, crisis management/PR services, cyber extortion/ransomware coverage, and data breach coverage, the median cost rises to £55,000.
ABI numbers
In the physical world, the insurance trade body the ABI’s quarterly premium tracker shows that the average cost of motor insurance fell, while pay-outs of claims were a record high. Claims for theft played a part, as the average claim for theft of and from a vehicle increased by £319 (3pc) on the previous quarter to £11.8k.
