Growth of Mobile Payments, Other Uses Leads Cyber Security Insurance Claims to New Heights
The latest report from Allianz Global Corporate & Specialty comes with a stark reminder about how inherently fragile our various online systems really are. While insurance claims between 2013 and 2018 showed all of the usual suspects when it comes to insurance claim filings, one major new subclass of claim has broken out: cyber security-related claims.
Allianz took a look at roughly 470,000 claims on corporate insurance policies across 206 different countries, which accounted for a combined total of $66.5 billion in payouts. Fire and explosions topped the overall list for biggest claims in the period between 2013 and 2018.
Yet the report notes that cyber-related losses are a steadily-growing factor to consider in the market as well. This is actually a point growing at about the same rate as the number of cyber insurance products. In fact, Allianz’s global head of claims, Philipp Cremer, noted that losses due to cyber attacks and relevant insurance claims are likely to rise even further in the coming months. Thus, he urged organizations to take a broader view of their likely insurance needs.
Cremer noted “What I think is still an area where businesses can further analyze and take precautions is in their supply chains [and] contingent business interruption claims. Understanding the supply chain, and finding ways of making it more resilient, I think, is for both our insureds and also for us something that is still an area to work on….”
This isn’t the first time businesses have been urged to look into cyber security-related insurance products. Several outlets have been promoting this as a new concept, and given that nearly half of all cyber attacks specifically target small businesses—who are most susceptible to loss due to disruption—such a concept would likely be a smart idea.
We think about a lot of different things when we consider cyber security, from updating passwords to internal firewall systems. We don’t often consider an insurance policy related to cyber security, and that is likely the next point for all concerned. The future of cyber security advice may boil down to three points: keep your passwords rotated, your patches up to date, and your insurancy policy paid up.