UK businesses almost £3bn out of pocket due to cybercrime

Report from global insurance firm Allianz Global claims global cyber insurance market to grow to more than £13bn by 2025

Cybercrime is costing UK businesses around £2.8bn annually, and accounts for 16 per cent of gross domestic product (GDP), a report from insurer Allianz Global has claimed.The global economy is also feeling the impact to the tune of £289.6bn annually, the insurer added.

As a result, the cyber security insurance sector is forecast to be worth more than £13bn worldwide by 2025 according to the report, which stated that risks are evolving far beyond privacy issues.

Currently only 10 per cent of UK companies have a cyber-specific policy according to the research: a number which is also set to grow in line with threats, boosting premiums from £1.3bn per annum today, to over £13bn in a decade.

Chris Fischer, CEO of Allianz Global Corporate and Specialty (AGCS), said: “As recently as 15 years ago, cyber-attacks were fairly rudimentary and typically the work of hacktivists, but with increasing interconnectivity, globalisation and the commercialisation of cyber-crime there has been an explosion in both frequency and severity of cyber-attacks.“Cyber insurance is no replacement for robust IT security but it creates a second line of defence to mitigate cyber incidents," he said.

The insurance firm added that even once a cyber policy has been purchased, a company still needs to manage the technological, operational and insurance aspects of the risks posed.

Risks are becoming increasingly complex, with future threats coming from intellectual property theft, cyber extortion and business interruption (BI) in the wake of an attack.

Georgi Pachov, a cyber expert in AGCS’s global property underwriting team, continued: “Awareness of BI risks and insurance related to cyber and technology is increasing.

"Within the next five to 10 years BI will be seen as a key risk and a major element of the cyber insurance landscape,” he said.