Threat of cyber attack pushing 'fear factor' in UK businesses

The seemingly impending doom of a cyber attack has meant businesses must now turn to insurance to protect their assets. This may sound dramatic, but the world has seen the impact a cyber attack can have on a business - and not just a small or medium-sized business.

Yahoo was seen as one of the invincible online companies, too big and powerful to succumb to a few ambitious hackers. They may have become slightly overconfident as time has gone on, but they now hold the unenviable title of 'largest known data breach in history'.

At the Cyber Symposium of 2016, almost 40% of respondents indicated that their online portfolio had grown by over 50% in the last year - significant growth in what now appears to be a vulnerable marketplace.

Inga Beale, CEO at Lloyd’s, who spoke at the Symposium said: “There is a huge exposure out there for businesses and there is still an air of complacency amongst them that they have it under control. At Lloyd’s, we are seeing huge cyber insurance uptake, and last year we introduced 15 different types of cover just for cyber, in anticipation of this demand rising in 2017.”

Most businesses in the UK commented that these new growth levels were being driven by a 'fear factor' surrounding a potential online breach, with 23% of respondents agreeing with this statement. They also agreed with the prediction that this would be the top driver for the demand for cyber insurance in 2017.

“Cybercrime is the fastest growing form of crime in the world, which means that for UK firms, it is not a case of ‘if’ you’ll experience a loss, but ‘when’,” said Graeme Newman, Chief Innovation Officer at CFC Underwriting.

“As the nature of crime changes, so too must insurance policies. The value of intangible assets now generally outstrips the value of tangible assets on corporate balance sheets. As the world becomes increasingly connected, insurers need to design future-proof policies.”