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Volume 27, Issue 3

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June 20, 2013

Hacking threat and tougher data laws promise insurance boom

LONDON (Reuters) - For European insurers frustrated that "cyber crime" policies have so far failed to find a ready market among skeptical companies, hope may be at hand.

Not only has a huge data loss by Sony Corp dramatically illustrated the risks of hacking raids on corporate data, but the European Union is working on regulatory requirements which threaten heftier fines on unprepared companies.

The net effect for the insurance sector is that its efforts to establish cyber cover as a lucrative business line alongside risks such as weather catastrophes may be about to bear fruit.

In the United States, cyber cover has grown to be a market worth more than $1 billion in annual premiums, but Europe has not yet followed suit, perhaps surprising given a run of high profile, and costly, hacking incidents.