Cyber insurance sales up 30% as hacker attacks on business soar
SALES of cyber insurance in Ireland have shot up by almost a third over the last three months as businesses rush to shield themselves against the rising threat of hacking attacks.
More than half of Irish firms have been hacked over the last year, according to recent research. This has prompted more businesses to snap up cyber insurance, said the American International Group (AIG), the main seller of the cover in Ireland.
Sales of its cyber insurance, known as CyberEdge, have increased by 30 per cent over the last three months, according to Scott Diamond, deputy manager with AIG in Dublin.
Furthermore, while it was mainly large companies that bought CyberEdge when it was launched over a year ago, the prevalence of hacking attacks since then means that smaller businesses are now rushing to buy the insurance.
Mr Diamond said: "In recent months, we have seen an increase in small and medium-sized firms buying the cover. Inquiries have come from a very broad range of companies, such as retailers, professional firms and media companies to name a few."
Irish businesses have been left reeling by a series of high-profile hack attacks over the last year. Last October, more than 80,000 people had their credit and debit card details stolen after the Clare-based company Loyaltybuild was targeted by hackers.
Loyaltybuild runs special offers and incentive schemes for major retailers, insurers and utility companies, including SuperValu and Axa. The personal details of about 1.5 million individuals were compromised during the attack.
The Data Protection Commissioner is currently investigating a hacking attack on the international software firm Adobe. In the data breach last year, the details of about 150 million Adobe customers were exposed.
So many businesses are now concerned about hacking attacks that major insurers are considering branching into cyber insurance.
Aviva doesn't sell cyber insurance in Ireland but is considering offering this insurance in Britain "on a small scale", according to a spokeswoman.
Cyber insurance protects firms against the expenses they could be hit with should a hacker steal information about a company's customers, such as credit card details.
The financial penalties that a firm could face for losing the credit card information of customers could run into hundreds of thousands of euro. Cyber insurance also covers firms for any loss of profits should a virus or hacker take down their computer systems and prevent them from trading for a certain time.
Under a new EU law, which is expected to kick in over the next year-and-a-half, companies could be fined up to 2 per cent of annual global turnover should they lose customer details or fall victim to a data breach.
Businesses will also have to inform their customers within 24 hours of an attack occurring that their details may have been compromised.
"We believe this new EU regulation will be a game changer as to how companies will view data risk and we expect it will lead to a further increase in enquiries for cyber insurance," said Mr Diamond.
He added: "Companies are waking up to the very real threat of cyber crime."
A spokeswoman for the Irish Banking Federation (IBF) described cybercrime as "an ongoing challenge for financial institutions, both here in Ireland and internationally".
Almost half of businesses expect that their risk of falling victim to cyber crime will worsen over the next two years, according to a recent survey by insurers the ACE European Group.