The rise of cyber insurance and the importance of data hygiene

Recent reports have shown that the cyber insurance market is enjoying a period of profitable growth (+20 per cent) and it is expected to reach a global value of $14 billion by 2022. The US is the largest market, the UK is Europe’s largest. This is potentially unsurprising given this week’s news that fines for data breaches issued by ICO over the last 12 months have doubled to an average of £146,000 and this would be more if the figures took into account the recent £500,000 Facebook fine for its now infamous Cambridge Analytica breach that saw the company taken to task on both sides of the Atlantic for failing to protect its user’s data.

It is estimated that fraud and cyber offences currently make up 47.3% of all crime according to the Crime Survey of England and Wales conducted by the Office for National Statistics and data breaches are one of the fastest growing forms of cyber fraud with millions of data records being affected every month. If you are interested in a monthly tally we recommend the IT Governance Blog which each month outlines the hacks and breaches that have occurred. This month’s total number of known leaked records stands at 44,701,278.

A further study, this one by the Ponemon Institute reveals the global average cost of a data breach is now $3.86 million, an increase of 6.4 per cent on last year. The average cost for each lost or stolen record containing sensitive and confidential information also increased by 4.8 per cent to $148.With such figures it is no wonder that businesses are increasingly investing in cyber insurance to protect them against breaches and data losses. However, it is worth remembering that prevention is sometimes better than a Band-Aid so ensuring a GDPR compliant data management and hygiene regime is business critical.