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No takers for cyber insurance as threats rise

74% of businesses have no cyber insurance.

By CBR Staff Writer

Organisations are skeptical about buying new insurance products which could protect them from cyber attack losses.

The primary reason for not buying the insurance products is that companies fear insurance firms will not honour the claims in case of a cyber attack.

According to a survey of those who have bought cyber insurance, 48% of think that the insurance provider will not pay if their organisation is really hit by cyber crime.

A survey by KPMG polled senior information security professionals and found that 79% of executives believe cyber security threats are likely to increase over the next twelve months, while 74% think that organised crime and state sponsored activity poses the biggest threat.

Despite the growing security threat, 74% conceded that their businesses have no cyber insurance, which could leave businesses vulnerable to cyber attacks.

KPMG International Information Integrity Institute head Mark Waghorne said: "It is worrying to see that so many businesses would rather risk having no insurance in place to protect themselves against a threat they believe is very real.

"It is also disappointing that cyber insurance is viewed as providing little comfort to those who have it, as almost half don’t believe they would be compensated properly if push came to shove.

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"Of the information security professionals we spoke to, 30% believed the market for cyber insurance does not appear to be sufficiently mature yet.

"Insurers will need to deliver more comprehensive packages in order to convince the business community that they can and will protect against losses on cybercrime."

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