A fear of cybercrime among businesses has led to a boom in cyber insurance, according to a new report.
The latest figures predict that the cyber insurance sector will grow at a rate of 27 per cent by 2022, with major players AXA, Allianz and Lloyds entering the marketplace.
Meanwhile, insurer Hiscox said it saw growth of around 40 per cent in 2017.
It’s hardly surprising, however, considering the threat firms face from potential data breaches.
Figures produced by the Centre for Strategic and International Studies estimate that cybercrime has cost the global economy some £291 billion.
Cyber security experts SecureData suggest that as many as 74 per cent of small and medium-sized enterprises (SMEs) have been a victim of cybercrime. Furthermore, 57 per cent of organisations struggle to retain personnel with the relevant skills to protect against a potential security breach.
Charl van der Walt, of SecureData, said the phenomenon has led to businesses buying cyber insurance “in a mad panic”.
“Unfortunately this will mean that businesses of all sizes will seek out the minimum cyber-security investment laid out by insurers, government, and regulators, rather than going above and beyond to protect their own, and their customers’, data,” he added.
The impact the General Data Protection Regulation (GDPR) may have on prioritising data security could also be a factor. GDPR will go into effect this May, and with it, a number of legal changes including fines of up to four per cent of company turnover for firms who fail to protect consumer data.