Cybersecurity is top of mind in today’s business world. Firms of all shapes and sizes are having to adapt and become cyber savvy in order to protect their internal and external operations.
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Global media is increasingly focused on large-scale cyber attacks and data breaches like Equifax and Wannacry. Cyber criminals have shifted their focus from technology to information and data-based breaches, making the protection of personal data a paramount concern for corporations today.
This worldwide interest in mass data breaches and cyber crime is a significant driver in the uptake of cyber insurance in Canada, according to Ruby Rai, cyber underwriting specialist at
AIG Canada.
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“As companies witness data breaches in the media, they start to think about how a similar event could affect their organization,” Rai told Insurance Business. “There’s a new environment among the C-Suite, where they’re questioning how secure their organizations are and how their cyber security risks impact their organizations’ risks in a more holistic way.
“Cyber insurance uptake in Canada has been slow compared to other countries like the US, but now that top tier executives are really tuning into the risk, I expect the market to expand. There’s also changes to the Digital Privacy Act coming soon that will put more onus on the organizations to consider their cyber security.”
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The first buyers of cyber insurance were technology companies. But as organizations across all lines of business move leaps and bounds in digital advancement, the demands on the cyber insurance product and value-added risk mitigation services have increased tenfold.
AIG’s Cyber Edge risk management solution is a competitive product in the Canadian cyber insurance market. It provides pre- and post-breach services and tools to help guide clients through a cyber event.
“At AIG, we consider cyber a peril so we look at cyber risk across all lines of business,” said Rai. “We’ve been writing cyber for more than two decades, so we have a good understanding of what clients’ expectations are when it comes to transferring cyber risk and developing risk mitigation.
“Human error is well known to be a primary cause of cyber breaches. Insurers and brokers can help to prevent this by offering effective pre-breach risk control services, including employee training and awareness campaigns and the establishment of a compliance environment within an organization.”
The challenge for insurance brokers in this space comes from the companies themselves, according to Rai. A lot of companies still don’t fully understand their cyber risks and therefore fail to properly evaluate their vulnerabilities.
Brokers have to help organizations reach that understanding and then advise about suitable coverage. Cyber risk management needs to be integrated throughout the organization and not addressed in isolation, she added.
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