Protect the Net: Is Cyber-Insurance the Future of the Industry?
With cyber-attacks on the rise and ransomware proving to be a persistent threat, there’s more pressure than ever before on companies to prevent the worst from happening. Of course, that’s not always possible when going up against sophisticated viruses and highly-skilled hackers - and that’s where preparation for the worst is playing a huge role in businesses’ approach to cyber-security.
Sensing the potential to help organisations to rebuild after a digital mishap, some insurers are now offering cyber-insurance. But with more of our lives heading online, the idea of self-driving cars decimating insurance policies, and data becoming an important business, could cyber-insurance be a glimpse into the industry’s future?
News recently broke that self-driving trucks would be trialled on Britain’s roads by the end of the year, providing a first-hand demonstration of the government’s dedication to automated vehicles. We’ve spoken about the implications of self-driving cars on the insurance industry on our blog before, and this trial undoubtedly brings that reality much closer to home than people first expected.
For insurers, the main concern with self-driving vehicles is the complication around who is responsible for crashes, and how policies will work. As we continue to embrace new technology such as self-driving cars and the Internet of Things, we should expect to see more questions being asked, especially ‘is insurance obsolete?’, ‘Does the industry need to be revolutionised?’, and ‘what do we do now?’
The Price of Data
Fortunately, these changes are countered by other innovations. Data, for example, has become a huge venture in its own right, with Big Data serving as a point of interest for many industries. As such, when something goes wrong, the organisation in question is directly affected, racking up devastating losses and damaging client relationships.
In this instance, cyber-insurance can help to recoup some of those losses, ensuring the company can recover from the data loss and, if a breach was behind it, they can afford to compensate affected customers.
For more malicious instances of cyber-attacks, insurers can take another tact. Ransomware – a type of virus that demands payment in return for a hacker returning access to data or machines – can be costly if businesses decide to pay up. Cyber-insurance, however, can see the ransom paid and hackers negotiated with in return for the data. This has already become a popular option, with ransomware-based cases rising from just over a tenth of total cyber claims, to a quarter – all in a year.
A Digital Future
As we head further online and put more stock into our data, we will naturally become more protective of that data and our businesses’ dealings online – providing insurers with the perfect opportunity to adapt to the times, whilst protecting their clients’ interests.
Over the next few years, as the industry witnesses more changes akin to those of car insurance, it’s likely that we’ll see insurers pick up on that possibility, shifting towards more widespread cyber-insurance services - and with cyber-attacks on the rise, this can’t be a bad thing. It also goes to show that the insurance industry really does know how to survive – luckily for us all.
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