General Insurance Article - As GDPR approaches Cyber Risk goes top of corporate agendas

The upcoming implementation of the European Union’s General Data Protection Regulation (GDPR), which takes effect in May 2018, has elevated cyber risk to the top of the corporate agenda for organisations doing business in Europe according to a survey conducted by Marsh, a global leader in insurance broking and innovative risk solutions.

 In the global survey of over 1,300 senior executives, 65% of respondents whose organisations offer products or services in the EU said that they now consider cyber as a top risk. In a similar survey Marsh conducted in Continental Europe last year, only 32% of responding organisations rated cyber as a top-five risk.

 GDPR-impacted organisations are already feeling the effect of cyber threats, with 23% of respondents stating that their European organisations were subject to a successful cyber-attack in the past year.

 “The imminent implementation of the GDPR is spurring firms to take a fresh look at their cyber risk, not just their privacy protocols,” said John Drzik, President of Global Risk & Digital at Marsh. “This survey indicates that the most prepared firms are using GDPR as a catalyst to enhance their cyber risk management, including a more economic evaluation of their risks and an increased focus on building resilience in the face of an inevitable cyber incident.”

 Organisations responded that they intend to spend more on cyber risk management. Of those respondents whose organisations have plans for GDPR implementation, 78% said they would increase spending on addressing cyber risk over the next 12 months, including spending on cyber insurance. Notably, 52% of those who do not have a plan for GDPR indicated that their investment in cyber risk management would increase.

 GDPR readiness will require additional attention in the immediate future. Just 8% of respondents at GDPR-affected organisations asserted that their firms were fully compliant; 57% of respondents indicated that their organisations were developing compliance plans; and 11% said they had yet to start. Smaller organisations were more likely not to have a plan for GDPR, with 19% of respondents from businesses with less than $50m annual revenue replying that no plan was in place.

 “In our experience, smaller UK companies have typically viewed the GDPR as a compliance-driven, tick-box exercise,” said Siobhan O’Brien, Managing Director at Marsh UK. “However – for these organisations in particular – it presents an opportunity for them to better understand their cyber risks and their data capabilities in such a way that enables them to grow their business.”

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