Cyber liability viewed as a major threat, risk managers defer buying insurance according to Zurich-sponsored survey
SCHAUMBURG, Ill., October 18, 2011—Nearly 60 percent of risk professionals believe information security and cyber exposures are serious threats to their organization, yet a majority of them don’t purchase cyber liability insurance, according to a new Advisen survey sponsored by Zurich, a global provider of property and casualty insurance.
Survey results indicate that 43.2 percent of 503 respondents—risk managers and risk management department professionals—characterize looming cyber threats as “serious,” with another 13.1 percent selecting “extremely serious” among a choice of descriptions.
With another 29.7 percent perceiving a “moderate” exposure, a total of 86 percent assess the potential risks as posing at least a moderate danger. According to the survey titled, “A New Era in Information Security and Cyber Liability Risk Management: A Survey on Enterprise-wide Cyber Risk Management Practices,” only 35.1 percent of the respondents said their firms buy cyber insurance, while 60.1 percent said they do not. “
Almost every organization has at least some cyber liability exposures, and losses can be devastating. It is surprising that more organizations don't buy insurance, especially since prices are falling in this soft market," said Dave Bradford, president of Advisen’s Research & Editorial Group in New York.
Survey results also revealed another key disconnect—between attitudes of risk managers and those of the directors and officers to whom they report. While 71.7 percent of respondents said information security risks are a specific risk management focus within their organizations, only 45.3 percent believe that their boards of directors view cyber risk as a significant threat.
In addition, only 57.9 percent of the risk management professionals said C-suite executives were equally cognizant of the seriousness of the risk.
“Information security and privacy exposures need to be addressed at the enterprise level with involvement from multiple areas,” said Tim Stapleton, New York-based professional liability product manager with Zurich in North America. “Key decision makers should recognize that this issue goes beyond the IT department.”
Other important findings from the report concern the cyber exposures that risk managers are most concerned about and enterprise-wide cyber risk management strategies to address those risks.
Zurich Financial Services Group (Zurich) is a leading multi-line insurance provider with a global network of subsidiaries and offices in Europe, North America, Latin America, Asia-Pacific and the Middle East as well as other markets. For more information about Zurich’s business in North America, go to http://www.zurichna.com/zna/media/news-releases/archive/boilerplate.htm
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Zurich, North America
Jeffrey M. Cohen