More firms bought insurance against cyber attacks in 2014: Marsh

Source:Global Times Published: 2015-6-9 22:58:05

Marsh, an insurance broking and risk management firm, said on Tuesday that more groups are seeking financial protection through insurance to cover losses from data breaches and business outages as the intensity of cyber attacks increases. 

According to a report released by the firm on Tuesday, in 2014, the number of US-based Marsh clients purchasing stand-alone cyber insurance increased by 32 percent over 2013, and the number will keep growing in 2015.

Healthcare and education clients had the highest cyber insurance take-up rates in 2014, respectively at 50 percent and 32 percent, followed by hospitality and gaming at 26 percent and services at 22 percent.

The report also said that all industries purchased more cyber insurance on average in 2014 than in 2013. Companies with revenue exceeding $1 billion purchased 22 percent higher cyber insurance limits on average in 2014 at $34.1 million compared to $27.8 million in 2013.

Insurers responded to this demand by offering broader cyber insurance coverage in 2014, including coverage for contingent business interruption and cyber-induced bodily injury and property damages.

Marsh also noted in the report that, in 2015, managing cyber risk would be a top priority for organizations. Technology failures and cyber attacks can create far-reaching outages affecting secondary systems, clients, and even vendors. Such events can also lead to higher recovery costs, which would be a new concern for boards of directors and senior management.

The report did not provide the data from China because the number of buyers for this type of insurance is limited.

Last month, Chinese online travel service provider International claimed that its website has been hacked by unidentified sources, causing the suspension of its servers for several hours. This comes after Alipay, a leading online payment platform that is part of the Alibaba Group, broke down in May as well.

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