Annual insured US data breaches could top $5bn: RMS

Insurable losses from cyber data breaches in the US could top $5bn each year, according to a new report from risk modelling firm RMS.

Using a new forecast to calculate baseline losses, RMS states that if all US businesses had cyber insurance, more than $5bn of data breach losses would be covered each year by the insurance industry. Data breaches are the most significant cause of cyber loss, it adds.

The report coincides with an update to the RMS Cyber Accumulation Management System. The second version of the system follows just 15 months after it was launched to keep pace with changes in cyber risk. The system also covers scenarios for cyber attacks that cause losses under traditional property insurance.

“In only 15 months since we launched the RMS Cyber Accumulation Management System, we’ve seen the cyber risk landscape change dramatically and version 2.0 of the system reflects those changes,” commented Dr Andrew Coburn, senior vice-president at RMS.

“We’ve seen the largest ever data breaches, denial-of-service attacks and attempted financial thefts. Data breaches can cost companies hundreds of millions of dollars, and our modelling shows the overall insurable loss across US businesses from data exfiltration is running at over $5bn a year. The past year has also demonstrated the potential for future systemic cyber catastrophes, for which overall losses would far exceed $5bn, and version 2.0 has the capacity to model this risk,” added Dr Coburn.