Ever since maritime traders sought to protect their precious cargos as they crossed treacherous oceans in the 14th century and beyond, insurance has become a popular way to hedge your bets. Insurance gave those traders something to fall back on. It did the same for banks, power companies, railroads and other major companies on which modern civilizations were built.
And now, it seems like there is a new kind of insurance created for a new age. Anti-Hacking insurance is there to cover you if your online business becomes the victim of cybercrime, which is becoming all too common in the modern age. Everyone from Sony to the UK National Health Service has been the victim of cyber crime in recent years, and when you consider that companies can lose billions as a result of data breaches, stolen info and other cyber criminal acts, it’s easy to see why it’s becoming so popular.
Allianz and Anti-Hacking
Allianz SE are one of the main companies behind this new movement, along with Beasley Plc. Both of these companies see this as a growing industry.
As things stand, this industry is generating around $3 billion in premiums from anti-hacking insurance. They predict that this could rise to $10 billion by 2020.
Basically, this insurance covers you for loss if you are hit by hackers, malware, ransomware or anything else that can damage your company. Obviously, it’s hard to put a value on certain files, but that doesn’t seem to be an issue here and if anything they are more than willing to accept that single pieces of data could account for millions’ worth of loss to a company.
Right now, this insurance is at its biggest in the United States. Here, an estimated $110 billion is lost to cyber crime every single year. They are by far the biggest targets for cyber criminals, followed by China and Germany, who both lose around half that amount. It is likely that the UK will follow, because while they lose less than $10 billion a year to cyber crime on average, this is huge in proportion to the country’s population and it is growing at a considerable rate.
All clients can take coverage as high as $100 million at Allianz, and half this at other leading companies. This covers them for all forms of loss. And according to the experts, while a major cyber attack is rare, the damage that it can do when it does strike is worth the cost of the premiums.
Is It Profitable?
These companies provide peace of mind. And while you might think that they would go bankrupt following just handful of claims, that’s far from the case. Insurance companies are used to paying out, especially in the United States where personal injury lawyers and claims hotlines can help people to push through successful claims in a matter of days.
Even with this in mind, Axa, the richest insurance company in the world still earns more than $100 billion a year, and this is a figure that is set to rise considerably by 2020 as anti-hacking insurance becomes more of a prominent fixture in our everyday lives.