Cyber assets more valuable than plant, property and equipment assets: Report
Organisations believe that their cyber assets are more valuable than plant, property and equipment (PP&E) assets despite spending four times more budget on insurance protecting the latter risks, according to the latest Aon/Ponemon report.
Organisations valued cyber assets 14 percent more than PP&E assets, the 2017 Cyber Risk Transfer Comparison Global Report shows.
"This unique cyber study found a serious disconnect in risk management," said Larry Ponemon, chairman and founder of the Ponemon Institute. "What's interesting is that the majority of companies cover plant, property and equipment losses, insuring an average of 59 percent and self-insuring 28 percent. Cyber is almost the opposite, as companies are insuring an average of 15 percent and self-insuring 59 percent."
The impact of business disruption to cyber assets is 72 percent greater than to property, plant and equipment assets, the report claims.
Quantification of probable maximum loss from cyber assets is 27 percent higher than from PP&E. Nearly 65 percent of organisations expect their cyber risk exposure to increase in the next two years.
While the majority of surveyed respondents find that cyber insurance is inadequate to meet the needs of their organisation, too expensive and has too many exclusions, 46 percent of respondents reported a data breach in the last two years with the average financial impact costing $3.6 million. Based on data breaches and security exploits experienced by the surveyed organisations, the greatest threats are business process failures that caused disruption to business operations as well as cyber attacks that caused disruption to both business and IT operations.
Kevin Kalinich, cyber/network global practice leader, Aon Risk Solutions, said: "This study compared the relative insurance protection of certain tangible versus intangible assets. We have found that most organisations spend multiples more premium for fire insurance, for example, than for cyber insurance, even though they state in their publicly disclosed documents that a majority of the organisation's value is attributed to intangible assets."
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