Insurers are missing the real opportunities the cyber market presents
Insurers are missing the real opportunities the cyber market presents, according to a report from KPMG, Seizing the Cyber Insurance Opportunity.
The vast majority of cyber claims currently made relate to privacy breach and normally cover the cost of notifying customers about an attack. However, this is just a small fraction of the costs firms face when hit by a cyber-attack. Some of the biggest risks are intangible, for example, the loss of intellectual property (IP) or reputational damage. These aspects may seem uninsurable but more innovative approaches, such as parametric cover or sophisticated risk modelling can help insurers provide this sort of protection.
Those insurers that find a way of covering these intangible elements will be met with huge demand. The scale and impact of attacks in recent years has made cyber security a top priority for boards. One challenger bank CEO recently told KPMG: “The only things that keep me up at night are the unforeseen risks – cyber threats.”*
Paul Merrey, Insurance Partner at KPMG, says:
“Technology brings a wave of new risks and insurers are only dipping their toe in the ocean. To really get a foothold in the cyber market requires two things: finding solutions to the intangible costs and recognising that smart technology means cyber risks will emerge everywhere, including within traditional lines like property, motor and aviation. To respond to this demand, insurers need a wholesale shift in product offerings and a drastic boost to in-house cyber expertise.”
Dan Trueman. Chief Innovation Officer and Cyber Unit Head, Novae, adds:
“Cyber risk is front and centre of businesses’ risk radars across every industry and in every country. The potential market is huge for those who get the products right. At Novae, we are building our capabilities to take a holistic approach to covering cyber-risk as we recognise that in a digital world, cyber can’t be one product.”
Notes to Editors
For further information please contact:
Christina Bridge, KPMG UK
T +44 (0) 207 311 4252
M: +44 (0) 778 950 4905
KPMG Press office
Tel: +44 (0) 207 694 8773
*Taken from the soon to be released KPMG Challenger Bank CEO Survey – Challenging Perspectives.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.