While executives more aware of cyber risks, only half buy insurance
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A survey Zurich Insurance Group Ltd. and Advisen Ltd. released Tuesday finds the recognition of cyber risk rising among risk managers and corporate boards, but the purchase of cyber liability insurance is leveling off.
The report, Information Security and Cyber Liability Risk Management, is based on an annual survey of risk managers, insurance buyers and other risk professionals.
Of the 507 respondents surveyed in August, 64% said their board of directors views cyber risks as a significant threat to their organizations, up from 54% in the 2013 survey. The report says well-publicized data breaches affecting some of the nation's largest retailers helped bring the scope of the threat to the forefront this year.
“If there was any doubt as to the existence of a data security epidemic, 2014 likely changed that,” according to the Zurich Insurance and Advisen survey. “This is the year that it became abundantly clear that no business, government or individual was immune to the threat of an attack.”
However, the survey found great uncertainty concerning preparedness, with only 62% of respondents being certain that their companies had a breach plan in place, which is down 10 points from last year's survey. Moreover, the survey found that only 52% have a multidepartmental information security risk management team, down from 56% last year and 61% in 2012.
The survey also found that the percentage of companies purchasing cyber liability insurance leveled off this year, with 52% of respondents indicating that their company had purchased cyber liability insurance.
“Businesses today are left with difficult risk management decisions related to cyber security and how best to manage the risks they face,” Bryan Salvatore, president of specialty products at Zurich North America, said in a statement. “They have to decide whether they should retain the residual risk of a cybersecurity breach or transfer it through the purchase of insurance.”
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