Companies now rank cyber security risks as greater than natural disasters and other major business risks according to a new study by Experian Data Breach Resolution and the Ponemon Institute.
The report, Managing Cyber Security as a Business Risk: Cyber Insurance in the Digital Age, is one of the first to examine corporate adoption and attitudes about the rapidly evolving cyber security insurance market and how companies are managing the potential financial damage of breaches.
Respondents include senior privacy and compliance professionals involved in evaluating cyber insurance policies and corporate risk management. The top industries represented are retail, public sector, health and pharmaceuticals, and financial services.
Companies surveyed acknowledged the potential financial impact associated with security breaches. Of the 56 percent that had breaches, they reported an average cost of these incidents as $9.4 million in the last 24 months. However, these costs are only a fraction of the average maximum financial exposure of $163 million that the companies surveyed (breached or not) believe they could suffer due to cyber incidents.
"We are reaching a tipping point where the majority of companies we surveyed now rank cyber security risks as high as other major insurable business risks," said Michael Bruemmer, vice president at Experian Data Breach Resolution. "We anticipate that demand for cyber security insurance is likely to increase in response to evolving breach response policies."
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