Government publishes report on insurance and cyber risk: The UK Government and the insurance sector have jointly published a report titled "UK cyber security: the role of insurance in managing and mitigating the risk". The report found:

  • insurers can help firms better manage their cyber risks by asking the right questions and educating clients, encouraging the adoption of cyber security best practice;
  • the UK insurance sector is already a world-leader, demonstrating that the UK is the natural home for a growing global cyber insurance market;
  • insurers' support shows they recognise having Cyber Essentials certification is a valuable indicator of a mature approach to cyber security in SMEs that contributes to the reduction of risk;
  • the contributing insurers will incorporate Cyber Essentials into their risk assessment process for SMEs, making it easier for firms to get coverage;
  • firms place cyber security amongst their leading risks in terms of likelihood and severity of impact;
  • banks and national infrastructure organisations are generally better equipped in modeling cyber risks than other institutions and businesses;
  • modeling of cyber risk has been difficult due to a lack of available data, but there are alternative approaches to valuing the risk of cyber attack including using stress testing;
  • there is a lack of awareness of cyber insurance and certainty about coverage, and less than 10% of companies have cyber insurance according to surveys;
  • a lack of data pooling poses a challenge for the insurers in the development of their pricing models and coverage;
  • the potential for the aggregation of losses impacting a large number of firms and arising from a single attack, leading to losses across a large number of firms, is a growing concern for insurers; and
  • the UK insurance market has a history of underwriting large complex risks and is established as a leading market in the provision of cyber insurance.

The report concludes by making a range of recommendations for insurers and government, businesses, insurance brokers and the market at large. (Source: Cyber Security Insurance: New Steps to Make UK World Centre)