It has been a common complaint among businesses that the insurance industry has not been able to keep up with the pace of cybercrime. However, the market is quickly growing and is already making a positive impact in some industries.
Maria Korolov writes, “The recent growth in the cyber insurance market is already improving cybersecurity in some industry segments, and has the potential to do more—if the industry is able to address its data problem.
“One area where cyber insurance has already made an impact is in the retail space, said David White, founder and COO at Axio Global, a cyber-risk company.
“After the 2013 Target breach, it became very difficult for retailers to get a decent price for cyber insurance unless they had completely switched over to end-to-end encryption, or had a definite plan in place for doing that.
“‘I spoke to a large retailer at a conference 1 year ago who was wringing their hands because they could not buy cyber insurance—the sort that would cover a payment card data breach,’ he said. ‘Their problem was that they had not allocated the funding to install end-to-end encryption and were not even planning to in the foreseeable future. The risk manager told me that they had approached the insurance market annually for several years and all she could get were “FU quotes.” The cyber insurance industry has been a substantial force in driving retailers to adopt end-to-end encryption.’”