The value of cyber insurance to the UK economy
The Association of British Insurers (‘ABI’) has commissioned Oxera to assess the impact of cyber insurance on the UK economy. This report considers the benefits and importance of cyber insurance policies for UK businesses and the UK economy more broadly, providing new insights from UK cyber risk insurers and insurance brokers.
We live in a rapidly changing society in which the way we work and carry out our lives is becoming ever more dependent on digital infrastructure. This digital transformation has brought great strides in efficiency to the workplace and opened the way for countless new jobs and investment opportunities, bridging what once seemed vast oceans between nations and continents in my adult lifetime. In 2020, with the onset of COVID-19, and the world beset by a global pandemic, we have seen decades of change in corporate practices and business structures evolving in a matter of weeks, all utilising the technology available to the full and pushing capabilities further than they have previously gone.
With increasing dependence on digital infrastructure comes increased risk. Our society, economy and lives have never been more reliant on the security and resilience of the computer systems on which our world now depends. Over the coming years, cyber threats will continue to plague businesses of all sizes and new threats will emerge, with the risk of a data breach or ransomware attack increasing and the impact of those attacks becoming ever more devastating.
It is in this context that the role of insurance can be seen more clearly as a key facilitator in the promotion of the increased cyber resilience of businesses and individuals, and in providing the financial support needed to get affected businesses back on their feet. This report seeks to provide insight into this fast-developing and growing insurance market, to set out the risks and challenges posed by increased digitisation, and to look to the future and the opportunities yet to be explored. What is clear is that the need to manage cyber risk is becoming ever more important for businesses of all sizes, and that cyber insurance will form a key part in the cyber resilience of business in the future.