Cyber security is now high on the agenda of businesses as they are locked in an arms race to stay ahead, or even catch up, to highly sophisticated cyber criminals. The comment was made at the 2018 World Economic Forum Annual Meeting in Davos. It was also stated that the aggregate economic cost of cyber security is now estimated over US$ One Trillion, versus roughly US$ 300 million lost to natural catastrophes in 2017.
With cyber-attacks increasing in frequency and severity, many companies are turning to insurance to cover mounting losses. Damage to reputation, internal and external business processes and compensation for losses caused by theft of clients’ data, could be significant. Cyber risk insurance is not a substitute for not being prepared and for not having implemented damage limitation measures, however it has become an important factor in minimizing Cyber risk.
According to Allied Market Research, a British analytical center, the volume of cyber risk insurance market will reach 14 billion US dollars, and by 2025, it will amount to 20 billion US dollars (according to Allianz, a German insurance company). The US market for cyber insurance is currently the largest market with 1.35 billion US dollars. This is not surprising since the US economy is information driven.
Russian market capacity of cyber risk insurance is approximately 15 million US dollars. Demand for this type of insurance has just started to develop: a small number of contracts have been signed and most of them by Russian subsidiaries of foreign insurance companies like Allianz, AIG, Chubb and Zurich.
Russian insurers such as Ingosstrakh and Alphastrakhovanie have started to sign cyber risk insurance contracts. There are over 20 of the largest Russian companies among Alphastrakhovanie’s key customers: the first company to request cyber risk insurance was MTS, a large mobile operator, the second one – VimpelCom.
By 2022 a large-scale cyber risk insurance market is expected to be created under the government-run program “Digital Economy” and insurance premiums in this sector could reach 20 million US dollars. Sberbank will chair the working group and The Ministry of Finance, Central Bank, the Federal Security Service and All-Russian Union of Insurers are assigned to assist.
Cyber insurance will become compulsory for a number of sectors as well as public bodies such as banks, military and industrial enterprises and tax authorities. This project is to result in amendments of the Federal Law “On organization of insurance” and implementation of a new type of service – cyber insurance.
Source: Credinform Russia