The costs of business interruption due to a breach is the top cyber risk concern for businesses across all industries, according to a new survey of captives.
Aon Global Risk Consulting, in its 2016 Captive Cyber Survey report, found that 95 percent of companies surveyed believe that the most important issue in cyber insurance is clear policy wording, and 75 percent of large companies have concerns about the loss adjustment process.
Other findings from the report include:
- 61 percent of survey respondents buy cyber limits in the $10-25 million range, but overall 60 percent of large companies do not buy cyber insurance
- Of those that do, 68 percent of companies surveyed buy cyber for balance sheet protection closely followed by ensuring due diligence comfort for the board
- Only 25 percent of respondents that buy limits are confident that they comply with international best practices and standards for information security governance
Aon analysts said that while captives are aware of the growing threat of cyber attacks, they lag in assessing their own risk and insurance needs.
“Our findings also indicate that there is a disparity between companies recognizing that cyber is one of the fastest growing and permeating risks, and actually understanding what their individual exposures and coverage needs are,” said Peter Mullen, chief executive officer of Aon Risk Solutions’ Aon Captive and Insurance Management practice, who spearheaded the report.
Kevin Kalinich, global practice leader for cyber/network risk at Aon Risk Solutions, said the use of cyber risk assessments is “surprisingly low” among the organizations surveyed.
This was Aon’s first cyber captive survey. The findings explore the organizations’ current attitude towards cyber threats, risk assessment, insurance purchasing trends and loss adjustment concerns and provides insight into current retail market trends, including captives and other risk financing solutions. The survey was conducted in fall 2015 and gathered input from risk managers and directors of more than 125 captive insurance companies.