{"id":14133,"date":"2018-10-28T22:39:17","date_gmt":"2018-10-28T22:39:17","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=14133"},"modified":"2018-10-28T22:39:17","modified_gmt":"2018-10-28T22:39:17","slug":"as-digital-threats-grow-will-cyber-insurance-take-off","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/as-digital-threats-grow-will-cyber-insurance-take-off\/","title":{"rendered":"As digital threats grow, will cyber insurance take off?"},"content":{"rendered":"

Nir Kshetri<\/a>, University of North Carolina \u2013 Greensboro<\/a><\/em><\/span><\/p>\n

Cyberattacks cost the world more than natural disasters<\/a> \u2013 US$3 trillion in 2015<\/a>, a price that may climb to $6 trillion annually by 2021 if present trends continue. But most people \u2013 and even most businesses \u2013 don\u2019t have insurance to protect themselves against this rising threat. <\/p>\n

Insurance against all kinds of risks \u2013 disease, disaster, legal liability and more \u2013 is extremely common. In the U.S., companies, families and even government agencies paid a combined $2.7 trillion in insurance premiums<\/a> in 2016 \u2013 and received payouts totaling $1.5 trillion<\/a>. But just $2.5 billion<\/a> \u2013 0.09 percent of the total spending \u2013 went to buy insurance against cyberattacks and hacking. Elsewhere in the world, there\u2019s even less coverage. For instance, in 2017 the cyber insurance market in India was $27.9 million<\/a>, 0.04 percent of the total insurance premiums<\/a> paid in the country that year. <\/p>\n

From my research<\/a> on cybercrime<\/a> and cybersecurity<\/a> over the past two decades, it is clear to me that cyberattacks have become increasingly sophisticated<\/a>. The cyber insurance market\u2019s extremely small size suggests that organizations and individuals might have underrated its importance. However, more and more internet users are finding reason to protect themselves. In 10 years\u2019 time, insurance coverage for cyberattacks could be standard for every homeowner<\/a>. <\/p>\n

Who is buying cyber insurance?<\/h2>\n

Certain types of companies tend to have \u2013 or not have \u2013 cyber insurance. The larger the firm<\/a> and the more closely it depends on computerized data<\/a>, the more likely it is to have coverage against digital threats. <\/p>\n

For a company, that can make sense, because a digital intrusion can cost hundreds of thousands<\/a> or even millions of dollars to fix and recover from. For individuals, the costs of a breach are lower, but still significant \u2013 even as high as $5,000<\/a>.<\/p>\n

Regular people are far less likely to have digital protection than companies are. In India, personal cyber insurance is less than 1 percent<\/a> of the total cyber insurance market. In the U.S.<\/a> and elsewhere, most products are targeted at rich people<\/a>. Insurers such as AIG<\/a>, Chubb<\/a>, Hartford Steam Boiler and NAS Insurance<\/a> sell personal cyber insurance policies as add-ons to homeowners\u2019 and renters\u2019 insurance.<\/p>\n

The insurance industry is doing more, too. A wide range of insurers such as Munich Re<\/a>, AIG\u2019s CyberEdge, Saga Home Insurance<\/a>, Burns & Wilcox<\/a> and Chubb all offer cyber insurance for individuals. These plans cover as much as $250,0000<\/a> to repair or replace damaged devices and to pay for expert advice and assistance if a cyberattack affects a policyholder. They may also include data recovery, credit monitoring services and efforts to undo identity theft<\/a>. <\/p>\n

Even health services may be included: AIG\u2019s new product Family CyberEdge policy includes a coverage of one year of psychiatric services if a family member is victimized by cyberbullying<\/a>. Also covered is lost salary if the victim loses a job within 60 days of discovering cyberbullying. Some insurers offer policies that provide help to assess policyholders\u2019 data security practices and scan for cyberthreats<\/a>. <\/p>\n

Emerging dangers<\/h2>\n

Another cybercrime that\u2019s becoming increasingly common is called ransomware<\/a> \u2013 in which malicious software takes over a person\u2019s computer<\/a> and encrypts his or her data. Then the program demands the victim pay a ransom<\/a> \u2013 often in bitcoin or other cryptocurrencies \u2013 to get the data decrypted. <\/p>\n

Some ransomware attackers don\u2019t actually decrypt the data<\/a>, even if they get paid \u2013 but that hasn\u2019t stopped victims from paying big bucks \u2013 at least $1 billion in 2016 alone<\/a>. Even so, there are insurers who sell coverage against ransomware, providing backup and decryption services \u2013 or even paying the ransom<\/a>. <\/p>\n

\n \"\"<\/a>
\n Smart home technologies may be vulnerable to hackers.<\/span>
\n mangpor2004\/Shutterstock.com<\/a><\/span>
\n <\/figcaption><\/figure>\n

As smart home systems<\/a> become more popular \u2013 as well as various technologies to monitor and help coordinate<\/a> local government services \u2013 they\u2019ll provide more potential entry points for hackers<\/a>. An average home insured by AIG has 20 Wi-Fi-enabled devices<\/a>. Replacing a hijacked home\u2019s entire smart lighting system, smart entertainment center, thermostat and digital security devices will be expensive \u2013 and the bill will only be higher for communities using internet-connected streetlights, water meters, electric cars and traffic controls<\/a>. Those are opportunities for insurance companies to step in.<\/p>\n

Some current challenges<\/h2>\n

Before cyber insurance becomes more common, however, the insurance industry will likely have to come to some consensus about what will and won\u2019t be covered<\/a>. At the moment each plan differs substantially<\/a> \u2013 so customers must conduct a detailed assessment of their own risks to figure out what to buy. Few people know enough<\/a> to be truly informed customers. Even insurance brokers don\u2019t know enough<\/a> about cyber risks to usefully help their clients.<\/p>\n

In addition, because cybercrime is relatively new, insurers do not have much data on how much various types of cybersecurity problems can cost to fix or recover from. They therefore tend to be conservative and overcharge<\/a>.<\/p>\n

As people become better-informed about the digital dangers in their lives, and as insurance companies are able to more clearly explain \u2013 and more accurately price \u2013 their coverage options, the cyber insurance market will grow and may expand rapidly. In the meantime, most policies have some degree of custom design, so consumers should be careful to look for policies that actually cover their needs, and not just evaluate plans based on cost.\"The<\/p>\n

Nir Kshetri<\/a>, Professor of Management, University of North Carolina \u2013 Greensboro<\/a><\/em><\/span><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Nir Kshetri, University of North Carolina \u2013 Greensboro Cyberattacks cost the world more than natural disasters \u2013 US$3 trillion in 2015, a price that may climb to $6 trillion annually by 2021 if present trends continue. But most people \u2013 and even most businesses \u2013 don\u2019t have insurance to protect themselves against this rising threat. […]<\/p>\n","protected":false},"author":44,"featured_media":14128,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3410],"tags":[5361,4327,793,5360,3082],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14133"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=14133"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14133\/revisions"}],"predecessor-version":[{"id":14134,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14133\/revisions\/14134"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/14128"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=14133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=14133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=14133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}