Insurance companies are expecting increased cyber-related losses across all business lines over the next 12-months, driven by increasing reliance on technology and high-profile cyber-attacks, research showed.
Over 60 percent of respondents estimate it is likely to incur more than one cyber related loss for every hundred non-cyber covered losses over the next 12 months in all lines of business apart from worker’s compensation compared to less than 50 percent in any line of business in 2017, according to research conducted by Willis Towers Watson.
Large cyber-attacks, like WannaCry or NotPetya, are also expected to be more frequent, with over 60 percent of respondents saying in the report they anticipate these occurring at least once every five years.
The increasing frequency of cyber-attacks and resulting threat to utility infrastructure led to the IT/Utilities/Telecom industry group reporting the highest perceived property silent cyber risk factor, with 42 percent of respondents reporting they are likely to incur ten or more cyber related loss for every hundred non-cyber covered losses.
“The insurance market considers ‘silent cyber’, or cyber-related losses under policies where cyber risk isn’t specifically included, to be a far greater risk than ever before,” said Anthony Dagostino, global head of cyber risk solutions at Willis Towers Watson in a post.
“The 2017 WannaCry and NotPetya attacks highlighted this risk and potential damage across all business areas – causing significant concern around silent cyber. This increased risk perception has highlighted the need for specific cyber coverage, but competitive market conditions are limiting the scope for coverage or pricing adjustments to be made in other lines of business.”
The survey ranks respondents’ silent cyber risk factor from less than 1.01, indicating less than one anticipated cyber related loss per hundred non-cyber covered losses, to 2.0, representing as many cyber losses as non-cyber losses over the next 12 months. Close to 700 participants from over 100 insurance and reinsurance companies were surveyed globally across five business lines, including: First party property, other liability (including auto), workers compensation, errors and omissions (E&O) and directors and officers (D&O).