More firms have cybersecurity insurance as threats rise

The number of Canadian firms with full cybersecurity insurance has risen dramatically in the past year — 40% have cybersecurity insurance that covers all likely risks. The second annual cybersecurity survey from research and consultancy firm Ovum, for Silicon Valley analytics firm FICO, finds that the number of Canadian firms reporting they have no cybersecurity insurance dropped from 36% in 2017 to 22% in 2018. However, nearly half of Canadian respondents who have cybersecurity insurance say it only covers some risks.

Canada’s financial services companies are the most prepared to handle cyber-risk; 56% of have full cyber-risk insurance coverage, which is an increase from only 23% a year ago. They also have the in-house capabilities to understand the risk of suffering a breach in the upcoming year, with 63% saying they have software that provides a score that tells them what their likelihood of a breach is (compared to 41% globally).

While 70% of respondents in retail and e-commerce say they have some form of cyber-risk insurance, half of those in the same industry don’t believe their coverage is reflective of the risk profile of their business.

Power and utilities firms are the most exposed to risk without cybersecurity insurance coverage — 60% report they have not taken out cyber-risk insurance, compared to just 6% of financial services firms in Canada. A full 40% of power and utilities firms say they don’t intend to take out cybersecurity insurance.

“Canada’s companies are well-aware of the threat of cyber-risk, and the uptake of comprehensive cybersecurity insurance is a testament to that,” says Kevin Deveau, vice president and managing director, FICO Canada. “However, there is still a long way to go, with many companies still out there that either have inadequate cybersecurity insurance or none at all. Not only is it important to obtain cybersecurity insurance, but to also ensure it matches the risk profile of the organization.”

Maxine Holt, research director at Ovum, adds, “We should not detract from the positive news here; almost 80% of Canadian organizations have elevated the importance of cybersecurity to a level that requires insuring, even if only partially.”

Ovum conducted the survey for FICO through telephone interviews with 500 senior executives, mostly from the IT function, in businesses from Canada, the U.K., the U.S., Brazil, Mexico, Germany, India, Finland, Norway, Sweden and South Africa. Respondents represented firms in financial services, telecommunications, retail and ecommerce, and power and utilities.

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This story was originally published by Canadian Insurance Top Broker.