Put Your Money Where Your Risk Is

 
 

cyber insurance risk management

Compared to property, plant and equipment (PP&E) assets, the impact of business disruption to cyber assets is 72% greater, organizations value cyber assets at 14% more, and quantify probable maximum loss from cyber assets is 27% higher, according to the 2017 Cyber Risk Transfer Comparison Global Report from Aon and the Ponemon Institute. What’s more, nearly 65% of organizations expect their cyberrisk exposure to increase over the next two years.

Yet businesses are spending four times more on insurance to cover property-related risks than cyberrisk. On average, organizations insure 59% of PP&E losses and self-insure 28%, compared to insuring 15% of cyber exposure and self-insuring 59%.

“We have found that most organizations spend multiples more premium for fire insurance, for example, than for cyber insurance, even though they state in their publicly disclosed documents that a majority of the organization’s value is attributed to intangible assets,” said Kevin Kalinich, cyber/network global practice leader at Aon Risk Solutions.

The majority of respondents said that cyber insurance is inadequate for their organization’s needs, too expensive, and has too many exclusions.

 
Hilary Tuttle

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About the Author

Hilary Tuttle is the editor of Risk Management.

 
 
 

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