Cyber cover take-up remains low warns ABI
Written by staff reporter
The take-up rate of cyber insurance by businesses in the UK remains worryingly low according to the Association of British Insurers (ABI), with the overall market size estimated to be less than a tenth of the size of the UK’s pet insurance market. Just 11% of businesses are thought to have a specific cyber insurance policy in place, meaning millions of small businesses could be at risk.
The ABI believes that the UK has the potential to be a world leader in cyber insurance, but it says the inability to access raw breach data risks is limiting the potential of the market. The ABI has asked the Information Commissioner’s Office (ICO) to make anonymised cyber breach data publicly available, which would enable insurers to price risk more accurately and manage exposure more effectively by feeding this data directly into their modelling.
It believes this would make cyber insurance more widely available, more accurately priced and better tailored to each business but, as yet, the ICO has not agreed to the request.
Despite the low take-up of cyber cover, the ABI figures show that claims pay-outs on cyber policies are one of the highest acceptance rates across all insurance products. It says 99% of the 207 claims made on ABI-member cyber insurance policies in 2018 were paid.
James Dalton, the ABI’s director of general insurance policy, said: “Cyber insurance is a valuable product – the claims acceptance rates speak for themselves and the additional support a business receives, beyond dealing with the pure financial losses, is a key attribute of most cyber insurance policies that is too often overlooked.
“Data is key to insurers’ ability to better understand and more accurately price cyber risk. We need the ICO to work with us to find what data can be shared to help insurers provide more cover to the many businesses that need it in this digital age.”