Cyber Security Spending Up, But Many Uninsured

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://ww2.cfo.com/applications/2014/11/cyber-security-spending-many-uninsured/


U.S. companies are increasing spending on information security in response
to the threat of cyber-attacks but may still be unprepared for the
widespread impact of a data breach, according to a survey of finance
professionals.

In a poll of members attending its annual conference on Monday, the
Association of Finance Professionals found that 62% of companies have
suffered an actual or attempted cyber attack sometime over the past year
and 32% of respondents rated cyber risks “highest” on a five-point scale.

Fears of a data breach have translated into greater investment in cyber
security, the AFP says, with 71% of organizations having increased spending
dedicated to mitigating possible cyber attacks over the past year and a
quarter boosting spending by at least 50%.

“Financial professionals view cyber attacks as not only a possible risk to
their companies, but also to the broader economy as a whole,” the report
says, noting that 73% of respondents believe data breaches at financial
institutions can have a significant detrimental impact on overall business
conditions.

“Cyber risk is arguably one of the biggest risks that businesses face,” Jim
Kaitz, AFP’s president and CEO, said in a news release. “Companies fear
direct risks from breaches of their corporate technology, and they fear
fallout from the economic impact of high-profile breaches within our
financial system.”

However, there is one area where companies may be coming up short in
protecting themselves. Only 15% of financial professionals reported that
their organization increased the amount of cyber insurance they carried
over the past year and, perhaps most surprisingly, 31% said their company
does not currently carry cyber insurance.

At an estimated $1 billion to $2 billion, 2013 sales of cyber insurance
were a fraction of the $1.1 trillion in total U.S. insurance premiums last
year. But the insurance industry has been predicting exponential growth in
the foreseeable future.

“Just about every business today needs cyber insurance,” Bob Hartwig,
president of the Insurance Information Institute, recently told CNBC. “More
and more businesses are transacting online and the reality is it’s only
going to increase as we move forward.”

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