PE firms lefts exposed without cyber cover, Mactavish says

A new survey commissioned by Mactavish reveals that almost a third (30%) of private equity professionals describe the due diligence that private equity firms carry out on cyber security issues of target companies as ‘average’, and 27% consider it to be ‘poor’ or ‘terrible.’ The research suggests that there is still much work to be done, with only 23% describing the current level as ‘good’ or ‘excellent’.

The consultant’s survey of 30 senior private equity professionals reveals optimism for the future as 83% of respondents expect private equity firms to insist that its portfolio companies have specific cyber insurance policies in place within the next three years. Similarly, when asked about the overall due diligence private equity firms run when it comes to private equity firms buying cyber insurance for their own operations, 53% of industry professionals interviewed said they believe the industry is focusing more on this issue.

Client services director at Mactavish, Liam Fitzpatrick says: “Cyber risks are a major and growing threat to all organisations but private equity firms are unique in that they can be left particularly exposed in three distinct but interrelated areas: the private equity firm itself, their transactional work, and then the risks faced at the portfolio company level.”

The lack of take up of cyber insurance in this industry comes down to cost and risk benefit, with over a quarter (27%) saying cover is too expensive when compared with the risks they face. The same percentage of respondents say they feel the cyber risk exposure the private equity sector faces is not serious enough to require insurance, while 13% of those interviewed said it’s because it’s difficult to find the desired cover.

Fitzpatrick bemoans a gap in the market. “It’s imperative that private equity firms and their portfolio companies have robust insurance in place. However, this is easier said than done as many off-the-shelf cyber policies are not up to the job and may not meet the requirements of a complex business like a private equity firm.”

    Share Story:

YOU MIGHT ALSO LIKE


The Future of Risk & Resilience with AI & Data
CLDigital's Co-Founder, Tejas Katwala, joins CIR Magazine to discuss how CLDigital is transforming enterprise risk and resilience. By integrating business processes, AI and data-centric strategies, organisations can move beyond compliance to proactive risk management – simplifying operations, strengthening resilience, and driving business performance. Listen now to explore the future of intelligent risk management.

Communicating in a crisis
Deborah Ritchie speaks to Chief Inspector Tracy Mortimer of the Specialist Operations Planning Unit in Greater Manchester Police's Civil Contingencies and Resilience Unit; Inspector Darren Spurgeon, AtHoc lead at Greater Manchester Police; and Chris Ullah, Solutions Expert at BlackBerry AtHoc, and himself a former Police Superintendent. For more information click here

Advertisement