Good news for cyber insurers. A majority of companies continue to have network security and data privacy insurance, and are making their purchase decisions faster and experiencing fewer purchasing challenges than in 2015.
The findings come in the newly-released 2016 Network Security and Data Privacy Study by Wells Fargo Insurance.
While in 2015 the study showed that 22 percent of companies buying insurance took more than 12 months to make the purchase decision, in 2016 just 8 percent of companies are currently taking that long, while 59 percent are taking six months or less.
Cost of coverage and finding a policy that meets a company’s needs remain the top two insurance purchasing challenges of 2016. However, the study found that 19 percent of companies did not experience any purchasing challenges, a significant improvement over 2015 when only 6 percent did not experience challenges.
The easier purchasing process may be related to less internal resistance, Wells Fargo said. Likewise, in 2016, fewer companies (24 percent) believed the risk was not big enough to warrant the purchase of network security and data privacy insurance.
Of the companies in the study that had purchased insurance, one-fifth reported filing a network security and data privacy insurance claim in the last 12 months, and most were satisfied with their coverage.
Another key takeaway for cyber insurers? Protecting the business against financial loss was the primary reason for purchasing coverage (81 percent) in 2016, as in 2015. However, protecting the company’s reputation is an increasing concern, with 70 percent citing it in 2016, compared to just 58 percent in 2015.
Purchasing insurance is an important step, but it should be used in tandem with developing and testing a comprehensive incident response plan and performing a thorough cyber risk assessment, Wells Fargo noted.
The second annual study analyzed trends of network security and data privacy issues among 100 decision makers at companies with $100 million or more in annual revenue.
Check out Insurance Information Institute’s (I.I.I.’s) latest white paper on cyber risk threats and challenges here.