For immediate release
I.I.I. Press Office: (212) 346-5500; email@example.com
NEW YORK, October 29, 2019—U.S. companies express concern about cyberattacks but are reluctant to buy cyber insurance in large part because the coverage is seen as either too expensive or unnecessary, a survey by the Insurance Information Institute and J.D. Power revealed.
The Small-Business Cyber Insurance and Security Spotlight Survey™ found 42 percent of companies did not purchase cyber insurance coverage due to what they said is its high cost. Thirty-five (35) percent of companies believe their risk profile does not require them to have cyber insurance. Other companies reported they were allocating internal resources to combat cyberattacks while a smaller percentage of those polled pointed to cyber insurance policy exclusions as keeping them from buying one.
The I.I.I.-J.D. Power survey’s findings were based on questions posed to 531 respondents, and 75 percent of them were answering on behalf of companies with 50 or fewer employees.
“To remain relevant in an increasingly interconnected and cyber-vulnerable world, we are seeing more insurers work with commercial customers to mitigate risks – in particular, with small and mid-size businesses,” said Sean Kevelighan, CEO, I.I.I. “We know many of the large cyber incidents can be sourced back to a smaller business or vendor, and thus, it’s increasingly critical to assist in loss prevention measures that can make the customer more resilient, while also reducing claims and damages overall.”
Smaller companies are uniquely vulnerable, and cybercriminals know it, the survey’s researchers determined. Larger companies can devote more resources to cyber security and employee training.
“Given small companies’ growing awareness and concerns about cyberrisk, insurers and agents and brokers might be able to increase their overall support of this market by addressing the issues of affordability and coverage limitations that seem to be an obstacle to purchasing,” said David Pieffer, Head of J.D. Power’s property and casualty insurance practice.
Threats from cyberattacks and system failures are not diminishing, the survey notes. As the Internet of Things (IoT), Artificial Intelligence (AI)-driven engagement, and cashless transactions become more commonplace, the risks small companies face from digitally empowered bad actors are likely to increase in number and cost as these risks become less distinct from those traditionally associated with property and business interruption, the I.I.I. and J.D. Power survey states.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org