Today’s reliance on technology is set to increase markedly in the coming years with the adoption of 5G connectivity and a growing dependence on digital technology. And it has raised the risk of cyber-attacks. Indeed, a 2019 Global Risk Management Survey ranked ‘Cyber attacks/data breaches’ as the sixth top risk or challenge that organisations are facing.
In the insurance sector, insurtech companies have a key role to play in guiding the insurance industry to find a way to price and mitigate against cyber-risk, even though some of the risks may be only partially insurable. Cyber-attacks are constantly evolving and it is often difficult to quantify the monetary value of a digital asset. The cost of cybercrime has been estimated as being in the order of $400 billion to $500 billion a year and rising.
Nonetheless, despite these challenges the cyber insurance market is growing. In September, Starling Bank, the UK’s mobile-based bank, added SME insurtech Digital Risks and cybersecurity platform CyberSmart to its business marketplace. Digital Risks work with SMEs to provide commercial legal protection and cybersecurity. Anne Boden, Founder and CEO of Starling Bank, said: “Small businesses are subject to up to 10,000 cyber-attacks per day, so it is vital that they are properly insured and have robust digital protection.” Earlier this year, San Francisco-based insurtech Arceo.ai secured $37 million funding. The company was created to solve cyber risk by blending cybersecurity, threat intelligence, and insurance into one platform.