Cyber claims almost double again in continental Europe during 2019, finds Marsh

Cyber claims notifications rose 83% in continental Europe during 2019 as cyber risk increased and more firms took out cover, according to analysis by Marsh. The analysis of cyber claims managed by the broker in the region also finds that ransomware accounted for 14% of all claims, double the number in 2018. Marsh’s figures show that claims notifications on standalone cyber polices have doubled in continental Europe each year from 2016 to 2018, and then jumped by 83% last year. A report on the numbers by Marsh, law firm CMS and consultancy Wavestone says the rate of payout is increasing at a faster pace than the number of policies being bought. “In continental Europe, the cyber insurance market is maturing and the rate of cyber insurance purchasing is increasing rapidly. As we see more claims triggered under these policies, the opportunity to learn about the landscape increases – not only in claims management, but also in incident management – and prevention,” it adds. The analysis also finds that two thirds (67%) of cyber losses stemmed from malicious attacks in 2019 and just 28% were accidental. Despite the rise of spear ransomware attacks, the research shows that most cyberattackers are opportunistic (65%) and do not demonstrate highly technical skills or target specific organisations. “They seek out and abuse systems that are poorly protected and easily attacked. These attacks could be avoided if security measures were more robust,” states the report. Of the 30% of attacks targeting specific organisations, the aim was to obtain sensitive and accurate information from within the organisation, it adds. The final 5% of attacks were caused by viral infections or spam. Marsh’s numbers also show that as attacks become increasingly sophisticated, with lengthy periods of business interruption, 71% of the costs and expenses associated with cyber claims now relate to assistance and emergency recovery measures. And they reveal that three sectors suffered a higher incidence of claims than others. Financial institutions saw 21% of reported claims in 2019, followed by manufacturers with 13% and communication, media and technology firms on 9%. Meanwhile, Wavestone’s research shows that it takes 164 days on average between a cyber intrusion and its detection. It found that 35% of companies failed to detect intrusion incidents at all, and only 26% were identified by a company’s cybersecurity detection service. Commenting the report, Jean Bayon de La Tour, head of cyber for Marsh in continental Europe, said: “As cybercrime, and ransomware attacks in particular, grow both in number and sophistication, organisations across continental Europe are increasingly exposed to major business interruption risks and incident management costs. As a result, more and more companies are purchasing cyber insurance to take advantage of the expanding protections it offers, particularly in light of the indirect consequences of the Covid-19 pandemic – including a significant increase in remote working.”

Cyber claims almost double again in continental Europe during 2019, finds Marsh

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