nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Cyber insurance in today’s society and it’s limitations

2 Comments

There is an increasing relevance for cyber insurance for businesses and organisations. Sony Play Station Network users have been reluctant to play web-based games ever since the release of the PS3 and thereafter, due to the continuous hacking issues. Apart from the gaming industry, the more recent celebrity hack of 2014 has been a sore topic, and one of the most talked-about in it’s year at that, causing the jeopardy of many a reputation. Of course, cyber insurance has been mostly utilized by corporations, and therefore the dynamics of the technological and telecommunications space are critically assessed to anticipate future trends and threats.

AIG SA has a wide range of for business cyber insurance products, which cover the cost of services to manage and mitigate a cyber attack incident, loss in income and operating expenses due to interruptions arising from network security failure. More of this can be seen here: https://www.aig.co.za/cyber_3914_594290.html . Surprisingly, reimbursement of costs incurred in relation to reputation damages due to a claim is possible. However, the extent of reimbursement is somewhat vague, as the following quote from http://www.marketplace.org/topics/tech/new-market-hack-attack-insurance-takes-root explains why: “Insurers face their own danger… They can’t predict hacking losses the way they can losses from tornadoes or fires… They are very much aware of their lack of actuarial data that underline how these policies are underwritten.” How would an actuary quantify the damage caused by the AL Jazeera leak of South Africa’s SSA papers?

It is worth mentioning that celebrities, like those affected by the celeb-hack of 2014, can’t cover their reputation as a result of a cyber attack, the way footballers and singers can take out insurance to cover any professional damages. Any form of personal cyber insurance products is unavailable as of this point. Sony, however, does offer AllClear ID to it’s users, a program to guard against ID thieves. More of that here: http://www.marketplace.org/topics/tech/tech-report-blog/sony-offers-identity-theft-protection

Advertisements

2 thoughts on “Cyber insurance in today’s society and it’s limitations

  1. The following link provides a detailed occurrence of cyber insurance, and speculates its future

    http://www.gfi.com/blog/cyber-insurance-is-it-necessary-should-it-be-mandatory/

    Here we see how, in SA at least, the need for cyber insurance is applied in today’s market

    http://www.fin24.com/Tech/News/Mobile-payment-evolution-picks-up-speed-20140714

  2. South Africa is one of the countries neglecting cyber crime and are less likely to take on

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s