The string of data breaches at Target, Home Depot, JPMorgan Chase, and so many other major brands has reinvigorated the cyberinsurance industry.
Cyberinsurance, which originally was rolled into other insurance policies or even considered unnecessary and ineffective, is enjoying a resurgence of late. Policy purchases have more than doubled in the past year, according to new data from The Ponemon Institute: 10% of companies held cyberinsurance policies in 2013, but 26% do in 2014. That's still a relatively low percentage, but insurers say cyberinsurance indeed is on the rise.
Kirstin Simonson, underwriting director for Travelers Global Technology, says US premiums today are estimated at around $1 billion, and it won't be long before they reach $2 billion.
A handful of carriers offered cyberinsurance coverage in the early days -- the late 1990s -- and the focus was more on privacy and trademark infringement. "There are now over 50 to 60 insurers" offering cyberinsurance coverage, Simonson says, including Travelers.
The surge, not surprisingly, is mostly due to data breach concerns. And cyberinsurance experts say demand is growing rapidly as companies watch victim organizations like Target and Home Depot try to dig out from under their data breach costs and fallout. Target, which reported $61 million of expenses related to the breach, had about $40 million in cyberinsurance, though security analysts estimated its overall breach costs could reach $500 million when all is said and done.
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Kelly Jackson Higgins is Executive Editor at DarkReading.com. She is an award-winning veteran technology and business journalist with more than two decades of experience in reporting and editing for various publications, including Network Computing, Secure Enterprise ... View Full Bio