Zurich Insurance's annual Advisen Cyber survey showed that, forthe first time in the survey's seven-year history, there has been asignificant decline in how seriously C-suites and businessexecutives view cyber risk, even as the nature of cyber attacks andrisks have evolved.

The report highlights three key findings:

• In 2017, 60% of the risk professionals surveyed said executivemanagement view cyberrisk as a significant threat to theirorganization, down significantly from 85% in 2016.
• Only 53% of respondents knew of any changes to their companies'cybersecurity systems in response to the high-profile attacks thattook place in early 2017.
• Growth in the purchase of cyber insurance has gone stagnantafter a steady increase from 35% to 65% over the past sixyears.

“These findings may indicate that businesses are not up to speedon the magnitude of impact that business interruption losses arebeginning to have on businesses,” said Erica Davis, head ofspecialty E&O for Zurich North America.

“Annually, the survey results are critical for understanding howbusinesses are thinking about cyber risk and what we need to do tohelp them protect themselves as we watch this issue continue toevolve,” Davis said.

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The cost of cyber threats

2017 saw a number of high-profile cyber attacks and data breaches. Data security losses compromised millions ofconsumers' personal information, and increased malware andransomware attacks shut down business network systems and disruptedbusiness operations.

The report states that according to an annual IBM study, in the last year, the average cost of acyber-related business interruption loss reached $3.7 million inthe healthcare industry alone.

Despite these concerning trends, the Advisen report found thatrisk professionals view cyber-related business continuity risk lessseriously than data integrity risk, even as business interruptioncosts increase and high profile business interruption attacks madeheadlines in 2017.

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Cyber insurance purchasing trends

The survey analyzed companies' cyber insurance purchasingbehaviors as well, and found that just 10% of respondentsidentified business interruption as the primary reason for buyingcyber insurance.

Over the last seven years, the number of companies buying cyberinsurance has increased from 35% in 2011 to 65% in 2017, but forthe first time this year, the number has gone stagnant.

Concerning researchers, these results indicate that businessesmay not be staying up to date with cyber-related risks or theprecautionary measures need to protect themselves against potentialattacks. The report's researchers suggest that, “Since businesscontinuity events are growing in both frequency and severity, theinsurance industry should further educate their clients on theseexposures, provide access to pre- and post-incident resources, andoffer products that meet the needs of their insureds.”

“Businesses must adopt a mindset of resilience that extendsbeyond the four walls of their organization,” Davis said. “As cybersecurity breaches persist, it is more critical than ever to engagein an ongoing, comprehensive review of all business partnerrelationships including how those vendors and business partnersapproach their own exposures and controls and how the vendors'supplier approach fits into their overall resilience plan.”

Zurich's 2017 Information Security and Cyber Risk Managementsurvey identified and analyzed the trends and current state ofcyber risk based on responses from 315 risk professionals. Thestudy is designed to provide a benchmark for future cyber risk preparedness and response strategies.

From: PropertyCasualty360