Cyber insurance struggles to overcome concerns over coverage

Insurance against cyber risk is a growing market, but doubts remain over its effectiveness

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With cyber attack now acknowledged as no longer merely a nuisance but a serious menace to organisational survival, the financial sector faces the traditional three options for handling such risks: reduce, transfer or accept. Transferring the risk by means of an insurance contract is tempting – the Basel capital adequacy rules explicitly encourage it, offering up to a 20% reduction in operational risk capital to banks using the advanced measurement approach if they incorporate the effect