Only a third of insurers confident at dealing with a cyber attack

Only one-third of insurers in the London Market believe their firm could withstand a major cyber attack, and almost half feel they are underprepared, according to a new survey by business technology and services provider Xchanging.

While 36% of respondents to the survey – conducted at the Xchanging London Market Conference 2015 this month – said they ‘definitely’ have sufficient measures in place to withstand a major cyber-attack, 30 percent said they felt they are only partially protected, 16 percent said they are insufficiently protected and 18 percent were unsure, according to Xchanging.

The firm said that insurers, like many other businesses, are vulnerable to attack by cyber criminals, As they hold vast amounts of client data. It said that reports of data breaches – such as the hacking of broadband provider TalkTalk last month – are becoming increasingly regular occurrences.

Xchanging referred to figures quoted by the UK Government in September which revealed 74 percent of small businesses, and 90 percent of major businesses had a cyber breach of security in the previous year.

“The insurance industry is grappling with the extensive threat of cyber-attacks from an underwriting and risk management perspective and, in the absence of enough meaningful data, modelling the risks involved remains a grave challenge,” said , executive director of Xchanging Global Insurance Services.

“As custodians of vast amounts of data, insurers are also aware that they, too, are vulnerable to cyber breaches – and the reputational damage that this can cause.”

“The recent cyber-attack on TalkTalk is the latest in a lengthy list of high-profile hacks of personal data held by government and commercial organisations.

Gutteridge said insurers must take the risk of cyber attacks very seriously and ensure that their prevenative measures are constantly reviewed and updated.

“They should also be mindful that, in some areas, a collaborative, industry approach in which knowledge and skills are shared among peers, may be the most effective way to strengthen cyber defences,” he added.

Since becoming authorised by the UK’s National Cyber Security Programme’s Cyber Essentials scheme in February 2015, Xchanging has been sharing technological expertise with other companies to help them understand their exposure to common cyber threats.

The digital survey gathered the views of 70 delegates on the risks and challenges facing the Lloyd’s and London Markets, including their perception of London’s future position as a global insurance centre.