The recent ransomware cyber attack named WannaCry has not stimulated much of an uptick in demand for cyber insurance coverage, according to research carried out among brokers.
The survey of 250 UK insurance brokerages shows that after the WannaCry cyber attack there has been little increase at all in the number of enquiries for cyber insurance cover, according to communications consultancy FWD which undertook the survey.
WannaCry was a bit of a wake up call for the insurance and reinsurance industry, demonstrating what a self-propagating virus can do in terms of disruption to businesses.
WannaCry was followed by the Petyr (NotPetyr) attacks of last week, which shut down operations for shipping giant Maersk for almost 48 hours and affected targets in more than 60 countries around the world.
While these two cyber attacks have been extremely highly publicised, with the impacts and ramifications clear and even though now causing enormous financial losses they have been good examples of how fast these things can spread and the potential for them to cause not just business interruption, but also contingent business interruption.
So you would have thought that cyber insurance enquiries would have increased, but apparently not.
FWD said that 73% of insurance brokers surveyed said that there had been no change at all in the number of enquiries for cyber coverage they received following the WannaCry attack.
In fact, just 4% of brokers said that they had seen a significant increase in the number of enquiries for cyber insurance coverage.
Given how high-profile the WannaCry attack was and how much time it spent in the news and newspapers, it’s surprising there hasn’t been a more rapid uptick in enquiries, unless of course businesses do not know that they can insure against cyber risks.
Awareness of the ability to cover cyber risks is lacking, many business owners think cyber protection is just anti-virus and best practice in how they use computers, and perhaps this survey provides some evidence that the industry needs to do a public relations job on cyber risk coverage.
Carole Herpin, Senior Account Director at FWD Research, commented; “The uptake of Cyber insurance in the UK has been relatively slow to date. Many people think that cyber would have the same impact as CAT or windstorm cover. That is, after a large incident, when people are reminded very clearly how important such cover can be, there is a major uptick in enquiries and purchasing among businesses. Many people in the market believed that the WannaCry attack, which hit businesses and institutions on a global scale, including the NHS, Telephonica and FedEx, would be a trigger point that pushed the market. Our research has shown this is not the case.”
Elliot Lane, Joint Managing Director at FWD, added; “Attacks of this type are becoming increasingly prevalent. Since WannaCry, there has been further cyberattacks, on Whitehall and the more virulent Petya ransomware attack. The question is what incident will be the catalyst to kick-start the market? Firms might be holding back on cyber insurance if they do not think that the right type of products are available, however if businesses are not prepared, then they could be facing significant losses. At this stage it appears that this is a risk many businesses are willing to take.”
