October 8th, 2018

Healthcare & Cyber Risk – Cyber Insurance to Manage Exposure

Posted at 1:00 AM ET

holding-healthcare-to-ransom-cover-image-6Key risks that healthcare organizations face today include patient data exposure, shared system data exposure and employee exposure. Recognizing that cyber risks cannot be eliminated, healthcare organizations are beginning to look to insurance or cyber risk transfer programs as a way to shift the risks, not just as a solution for balance sheet protection but also for contractual evidence and compliance. (1)

Prompted by the wave of high-profile attacks and new data protection rules, annual gross written cyber insurance premiums have grown by 34 percent per annum over the past seven years. (2) The European Union Agency for Network and Information Security has also found a positive correlation between cyber insurance takeup and the level of preparedness, (3) and healthcare organizations are only beginning to recognize this.

According to Marsh-Microsoft Global Cyber Risk Perception Survey 2017, while less than half, 49 percent, of the healthcare respondents’ organizations have cyber insurance coverage, the number is comfortably more than the cross-industry average of 34 percent, but marginally behind financial institutions, which is at 52 percent. We understood from respondents that have estimated their losses from cyber incidents that both healthcare and financial institutions suffer the greatest financial impact. Quantifying cyber risks and creating greater awareness can catalyze actions – such as increasing cyber insurance coverage – to mitigate cyber risks. (4)

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(1)Marsh, 2015. Cyber Risk Healthcare Brochure.

(2)Marsh & McLennan Companies (2018). Cyber Handbook 2018.

(3)Marsh & McLennan Companies & OECD (2018). Unleashing the Potential of the Cyber Insurance Market: Conference Outcomes.

(4) Oliver Wyman and Marsh & McLennan Companies’ Asia Pacific Risk Center (2017). Cyber Risk in Asia-Pacific: The Case for
Greater Transparency.

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