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Data Hacks Drive Profits for Insurance Companies

Posted on : November 29, 2019 By
Data Hacks Drive Profits for Insurance Companies
Technology 

Last updated on May 21st, 2020 at 10:34 am

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Data breaches can be expensive especially for large enterprises. The growing number of cyber-attacks are compelling enterprises to invest in getting insurance cover for their business. Marriott has faced losses worth $100m since 2014 due to a compromise of up to 339m guest records. However, insurance policies have protected them from being affected by the huge losses, and it is said that $102m has been paid to the company. Huge data breaches and ransomware attacks have created the urge that they need to be protected. Additionally, enterprises invest in professional and reliable cyber security testing services to keep their businesses safe from malware attacks. 

Data Protection Regulations for Enterprises

Cyber insurance exists since the 1990s when hackers tried to take down a number of websites 

down and companies looked for insurance coverage to protect their businesses from risk. In the U.S. data protection regulations and fines for data breaches have been implemented which convince enterprises to buy insurance. A similar trend is seen in Europe where the General Data Protection Regulation (GDPR) is implemented to improve cyber security. Just like typical insurance policies, cyber insurance cover customers who have suffered a cyber attack. But there are services associated to help customers whose systems have been attacked. These services include forensic investigators to identify problems and offer solutions, expert negotiators to deal with ransom demands, etc. Insurance companies consider cyber security as a rare opportunity for growth but have made it into the market. 

Why Cyber Security Testing Services?

The global market for cyber insurance is expected to grow from $6billion of premiums per year to $15billion by 2022. This growth could carry a huge cost for insurance companies too. Enterprises should invest in a good insurance plan but they should also consider cyber security testing services to keep their systems, networks, and applications protected. Insurance companies have different models for cyber risks. They need to develop policies that can keep pace with the ever-changing nature of cyber-attacks. It is uncertain what malicious hackers could possibly do with data hacks, so it is important to avoid any large-scale cyber attack. 

Conclusion

Looking at the previous years, we can see cybercrimes of all types increasing at an exponential rate. There is a recognition that cyber security is a huge growth area for the insurance industry. The insurance market in the U.K. has also assessed the cost of a large-scale cyber attack. So insurance companies have greater chances to make their way forward by offering insurance plans to all business sizes. Meanwhile, enterprises are also watching out for possibilities with cyber security testing services to ensure that all data protection policies, security checks, and other measures are in place to protect businesses from potential cyber risks. Data hacks and breaches tend to drive potentially high profits in the insurance industry. It is a niche market where insurance companies can grow and provide businesses with data security and cyber protection.