Two-thirds of insurers expect cybersecurity to receive escalated priority within the enterprise risk function this year, according to Wolters Kluwer's Regulatory & Risk Management Indicator report.
The study, based on a survey of 377 insurance professionals, found carriers increasingly anxious about their enterprise risk exposure after a wave of corporate cyber attacks. "Privacy and data protection" was the highest-cited specific area of concern by 62% of respondents. The rise in tech-related concern offsets drops in most other risk management issues. In the two previous iterations of this study -- 2015 and 2013 -- market conduct exams took that slot; however, concern over those fell precipitously this year below not just privacy and data protection, but also "E-delivery and electronic communications."
Only regulatory compliance risk is competitive with the technology issues. When asked their top risk management challenge, 21% of respondents cited that area, but the next two -- cybersecurity (18%) and implementing or updating new tech (11%) were both tech-related.
“While our survey doesn’t measure why risk management concerns have spiked, it is very likely that the wave of high-profile media stories detailing data breaches, hacking, and other risk control failures across the financial services sector has contributed to insurers’ heightened angst about their ability to manage risk," says Chuck Ross, VP and GM for Wolters Kluwer’s Compliance Program Management business. “Moreover, the significant upward leap in risk management anxiety indicates that many insurers are nowhere near a manageable comfort level when talking about their organizations’ relative risk exposure.”
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