Today, the pace of innovation is reshaping the insurance industry, especially in digitisation and cyber insurance. In fact, a growing body of research indicates that the risk of cyber attack is one of the most complex and critical risks facing business today – and that it now poses an increasingly severe threat to the entire global economy. As businesses’ reliance on technology and connectivity increases, they become more vulnerable than ever.
Globally, it is estimated that a major cyber attack could cost the economy up to $193bn and affect more than 600,000 businesses worldwide – primarily in the retail, healthcare and manufacturing sectors.
In Europe, cyber attacks are one of the costliest threats to businesses and governments, putting an estimated average of $9.36bn of GDP at risk annually. As businesses continue to digitise operations, supply chains and business transactions, and with the development of new technologies such as artificial intelligence, the Internet of Things and robotics, new threats are also emerging. These range from data breaches to ransomware attacks, or damage to crucial infrastructure and networks.
In addition to business interruption, cyber incidents can result in significant reputational damage and financial penalties. Finally, the introduction of GDPR has recently increased regulatory scrutiny and contributed to setting higher cyber security standards for businesses. This includes a requirement to report any data breach within 72 hours, or risk facing a fine up to 4% of annual worldwide turnover. As a result, the significance of insurance in this new landscape cannot be understated.
Support and protection
Given the rising exposure to cyber threats, it is of paramount importance for businesses and governments to develop sound risk management strategies. Considering the increasing demand for specialist cyber products in Europe, Lloyd’s – the world’s leading insurance and reinsurance market – remains committed to providing our European partners with the support and protection they need to grow and prosper. Having pioneered the first cyber insurance policy more than a decade ago, Lloyd’s continues to develop the cyber products and services to meet the evolving needs of our customers across the continent.
Partner against crime
The service provided by Lloyd’s includes working with businesses to identify risks and vulnerabilities to mitigate the likelihood of cyber attacks, before they materialise. Then, when a cyber incident does arise, cyber insurance can provide a financial pay-out, as well as on-the-ground support during the crisis period. As a result, it helps businesses protect their balance sheets while simultaneously improving their risk mitigation strategies. Thanks to the combined scale, expertise and capacity of more than 77 expert cyber risk insurers in one place, the Lloyd’s market now underwrites approximately a third of the global cyber market. To ensure that we continue to develop cutting-edge solutions to help our customers build resilience against new and emerging threats, Lloyd’s continues to adapt and deepen our unrivalled expertise in the most complex risks facing our clients in Europe and across the globe.
Lloyd’s was a partner of choice as the world moved from the industrial age to the service age. As we now start the move into the data age, we believe we are again ready to partner with the world in this transformation.