Here at the Insurance Tech Insider, we’re good at many things. We write good. We cover the hottest insurance trends and technologies like champions. And – if we may be so bold – we’re all ridiculously good looking.
But we suck something awful in one area – we can’t math.
Seriously…we couldn’t algebra our way out of a wet paper bag. And you can just flat out forget about calculus. When I asked our staff what calculus was, most of them thought it was the name of the thespian robot from Futurama.
So, needless to say, we rely on other people to do math-type-stuff. All of that number crunching is over our heads, above our pay-grades and yet somehow beneath us. So, we leave important studies and research to those best suited to it – NERDS!
In just the past few weeks, we’ve seen two really interesting studies published by the extremely smart folks at Aon, a global professional services firm that provides a range of risk, retirement and health solutions. And – as if they’ve been reading our minds…or just reading this publication – the studies involve an area that we’ve been covering extensively on the Insurance Tech Insider – cybersecurity insurance.
Let’s take a look at what those nerds found out:
EMEA Spend on Property-Related Risk Four Times Higher than Cyber Risk
Don’t let that dry-as-toast headline fool you. This is a pretty big deal.
Basically, the folks at Aon and the Ponemon Institute surveyed over 500 individuals in Europe, the Middle East and Africa (EMEA) involved in their company’s cyber risk management as well as enterprise risk management activities.
And what did those folks say? They said that they care about their networks and protecting their data. The funny thing is, although they claim to care, they’re not backing up their words with actions.
According to the report, “…while 38 percent of businesses surveyed confirmed they have experienced a cyber loss in the past 24 months, only 15 percent of their probable maximum loss (PML) is covered by insurance.”
If cybersecurity and protecting their companies against cyber risk was such a priority, wouldn’t they cover themselves against losses from cyber breaches just a bit more? Shouldn’t they be insured for far more than 15 percent of their PML? The answer is clearly, “yes.”
And, if you’re thinking, “Maybe these particular businesses just like to live dangerously. Maybe they don’t carry much insurance on anything.” The study debunked that, too.
According to Aon and the Ponemon Institute, that 15 percent coverage against their PML for cyber loss is, “in stark contrast to the policy limits purchased against physical assets like Property, Plant and Equipment (PP&E), where around 60 percent of their PML is typically covered.” And that’s despite the fact that the impact of business disruption to information assets is 50 percent greater than to PP&E.
What does that all mean? Basically, companies in EMEA are more worried about insuring and covering loss of physical things – like equipment and property – than they are about cyber loss, even though cyber loss hits them harder.
Ummm…maybe it’s time to shake that up?
Health Care Systems are Expected to See Stable Claim Frequency, but New Challenges are on the Horizon
Also, once again, please ignore the blandness of that mayo-on-white bread headline, because this is a big deal. (Editor’s note: Seriously…who is writing these headlines and why do they hate interesting things?)
According to this study – which was also conducted by the fine folks at Aon but in collaboration with the American Society for Healthcare Risk Management this time – risk facing healthcare companies is relatively flat. Which is…good…we guess?
However, despite the fact that things aren’t getting particularly more or less risky for healthcare companies, the study did identify a few risk trends that healthcare companies need to think about. To the surprise of exactly no one, the increasing risk of cyber breaches is among those trends.
According to the study, “The changing environment and increased use of technology within the health care field makes cyber risk one of the top concerns for health care risk managers…”
If there’s one key takeaway from these studies – at least for us – it’s that companies need to start getting more serious about their cyber risk and cybersecurity insurance. And that we love and need smart people for pointing these things out for us. Thanks, NERDS!