According to a recent report published by the Ponemon Institute and Aon, a significant number of large corporations believe their cyber assets are more valuable than plant, property and equipment. However, the 2017 Cyber Risk Transfer Comparison Global Report has revealed that companies are four times more likely to spend budget on insurance for physical assets than for cyber assets.
On average the companies surveyed insured an average of 59% and self-insured 28% of plant, property and equipment, but only insured an average of 15% and self-insured 59% of cyber risks. Yet the majority of companies surveyed spent considerably more on fire insurance premiums than on cyber insurance, despite the fact that the risk of any particular building burning down is significantly lower than 1%, and despite disclosing in publicly filed documents that the majority of an entity’s value is attributed to intangible assets.
The majority of companies surveyed had found cyber insurance to be inadequate for the needs of the organisation, too expensive and contained too may exclusions. However, 46% of those surveyed reported a cyber risk event in the form of a data breach in the last two years, which had caused an average financial impact costing some US$3.6 million.
It is forecast that 65% of companies expect their cyber risk exposure to increase in the next two years.
Despite the lack of budget applied to cyber risk insurance, the 2017 Cyber Risk Transfer Comparison Global Report has found that cyber risk is a major concern for many businesses in the USA and globally. Companies are therefore increasingly introducing measures to identify their cyber risks, but whilst it is recognised as a significant threat, it is often not managed properly and can have a considerable financial impact.