‘Every large firm to have cyber cover in three years,’ says Marsh leader
As cyber incidents become more frequent and sophisticated, there is a greater need for firms to protect themselves against cybercrimes, according to Marsh.
The global brokerage has predicted that in three years, every large company will have some kind of cyber insurance, according to a Financial Times report.
Mark Weir, UK head of Marsh, said that demand for cyber insurance continues to grow as businesses continued to grapple with the ever-changing coverage.
“We are seeing a growing demand for clients to help them get their arms around the risk of cyber attack and to get cover from the insurance market.
“In three years, every large firm will have some kind of cyber insurance.”
The financial services industry, in particular, needs to be adequately covered against cybercrimes as lobby group TheCityUK called the industry the “perfect target” for cyber attack, as cybercriminals find banks, insurers, asset managers, and other finance companies that hold vast amounts of sensitive information and money attractive targets.
Weir warned that financial services companies vastly overestimate how much insurance they have against cyber attack. According to a survey Marsh conducted last year, 50 per cent of financial executives who thought they are insured against cyber attacks, were actually just 10 per cent covered.
This confusion about the companies’ level of cyber attack cover reflects that the insurance sector is failing to take cybercrimes seriously enough, Weir said in a cyber security conference in London last Tuesday. He said that: “If there was a major cyber event in the City today, the uncertainty could do damage to the insurance sector.”
John McFarlane, chairman of The CityUK and of Barclays, said cybercrime is “the hidden enemy, operating inside our organisations and inside our devices.” He said they are difficult to detect and that none of them has been prosecuted so far.
To mitigate the risk of cybercrime, TheCityUK recommended that financial firms share information about the threat of hackers across the system. It also proposed the creation of a Cyber Forum to combat rising cyber threat and provide practical actions to mitigate cyber risk, and called for tax breaks to boost investment in cyber defences.
Some senior bankers, on the other hand, said worries about breaching customer privacy laws or competition rules are barriers to sharing information on cyber security. They are also worried about reputational damage of having been hacked.