Cyber preparedness falls short: Airmic survey

Cyber risk is now a top concern for Airmic members but many believe the ability of their organisations to respond is falling short. According to Airmic’s latest member survey, cyber business interruption and data breach are the second and third most concerning risks for risk managers, just behind reputation. However, risk managers expect cyber to move to the top spot within the next three years. But the survey also found that many risk managers feel their organisations are ill prepared to confront cyber risk. Just 33% are confident that their main cyber risks have been identified and quantified. Less than half (44%) are confident that their organisation has prepared for a cyber incident and only 25% say data assets have been mapped and protected. According to Airmic, this lack of preparedness should be a concern. The survey also found that cyber risk is being managed separately from broader risk. Only 7% of risk management respondents have direct responsibility for cyber risk, while only 23% say mitigation is being driven by the board. Airmic says that a common challenge facing all companies is how to embrace fast-evolving digital technology. This represents competitive opportunity but also raises a minefield of new threats. Risk managers are too reliant on legacy models to manage such risks, according to Airmic. Only 20% of survey respondents have full confidence in digital technology, while just under a third are confident they have a clear cyber risk management and governance framework in place. Interestingly, cyber exposures are among the risks corporates most want to transfer to insurers. Cyber business interruption is the third most desirable risk on the list after natural catastrophes and terrorism. Three quarters of risk managers already purchase standalone cyber insurance, according to the survey. Some 45% of respondents said that transferring data breach risk to the insurance market was their preferred mitigation approach, compared with 41% who would prefer to reduce exposure. For cyber business interruption, 49% would prefer to transfer the risk while just 33% would look to reduce exposure. According to Airmic, risk managers would like to see the insurance industry extend its cyber offering, particularly for non-damage business interruption. More than half (57%) of Airmic members surveyed said they would like insurers to focus product development on business interruption, while 54% want wider cover for data breaches. Less than a quarter are calling for increased capacity, while the price of cyber insurance is of least concern. Risk manager worries about cyber insurance have been shifting, according to Julia Graham, deputy chief executive and technical director of Airmic. Risk managers are no longer worried about a lack of cover, the size of deductibles or limits. But there is concern over the lack of consistency between cyber insurance offerings, definitions and wordings, she said.

Cyber preparedness falls short: Airmic survey

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