The Lloyd’s Market Association (LMA) has published a new best practice guide to help insurers tackle the growing threat of cyber risks.
The document, titled Practical Management of Cyber Exposures and Aggregations, aims to provide the market with insights on managing the complexities of cyber risks, which are becoming increasingly difficult to assess and mitigate.
The report highlights the challenges insurers face in collecting and standardising data on cyber exposures. It evaluates current modelling techniques and offers recommendations on improving data collection and analysis.
According to the Cyber Security Breaches Survey, UK businesses faced approximately 7.78 million cybercrimes of all types, including 116,000 non-phishing cyber crimes in 2024. Meanwhile, nearly 60% of UK companies experienced ransomware attacks last year, a 10% increase from the number of attacks in 2023, Statista reported.
The financial toll is also significant, with the average cost of a cyberattack to a medium-sized business in the UK reaching £10,830, according to TwentyFour IT Services.
The LMA report calls for a coordinated, cross-market approach to improve data sharing and enhance risk modelling. It also stressed the importance of using emerging technologies and establishing standardised frameworks to better assess and manage cyber risks.
Paul Davenport, finance & risk director at the LMA, pointed out that cyber risk is unlike traditional insurance perils.
“Cyber events don’t respect geographical or sectoral boundaries, and they are not easily constrained by time or space,” he said. “That makes it even more critical that we get the data collection right and develop a unified approach to exposure management.”
Sanjiv Sharma, head of actuarial & exposure management at the LMA, echoed this, stressing the need for insurers to adapt to the fast-changing cyber threat landscape.
“We need a coordinated approach to manage this risk effectively, and this report provides the market with the necessary tools and recommendations,” he said.
