Evolving cyber risk landscape prompt updates to AIG’s cyber solution

The financial consequences for businesses that suffer a cyber attack could spiral under new EU privacy proposals, according to AIG.

The warning came as the insurer announced enhancements to its cyber insurance policy.

The firm said a range of factors are “driving an evolution of cyber risks” including the rise of cloud computing and mobile technology. An increase in businesses outsourcing their IT operations and data storage was also said to contribute to the change in the risk landscape.

Citing research for EY, AIG said 66% of UK businesses reported a 5% hike in security incidences.

AIG cyber, media and technology UK lead Raheila Nazir added: “The impending EU legislation has increased potential fines to 5% of annual global turnover if companies are found to be in breach of rules set out under a new framework put forward in 2012 by the European Commission.

“Despite this, many organisations are failing to recognise the scale of the cyber threats they face, the importance of taking proactive security measures and the need to have adequate protection in place should the worst happen.”

As result, the firm has updated its cyber insurance offering bringing first party cover “to the forefront” of its existing policy.  

Speaking to StrategicRISK, AIG head of cyber products and technology, media & telecoms (Europe, Middle East and Africa) Jamie Bouloux said: “We wanted to move focus away from the third-party liability element and look at how we can bring a more first-party and first response service to the forefront of the [existing] product.”

Bouloux added: “We wanted to make sure we had the capabilities to handle a breach for a client in EMEA, anywhere across the world. In doing that, the focal point of our product is based upon an element of first response so if our client believes they have suffered a security failure, a system failure or a breach of data – corporate or personal – they have the ability to access a 24/7 hotline where they will speak with a breach coach within the hour to identify the issue and move forward in responding to the breach.”