The US increased its investment in cyber insurance by 89%

Cyber insurance is becoming a critical part of modern business — in 2016, U.S. manufacturers paid $36.9 million for cyber insurance, up 89% from the year before. Cyber attacks can be devastating for businesses in any industry, and businesses can’t afford to ignore them.

Shares in pharmaceutical giant Abbott Laboratories ABT fell 1.9% after it emerged that some of the company’s defibrillators and pacemakers could be compromised by hackers. The U.S. Food and Drug Administration (FDA) issued a warning letter about cyber threats facing medical device manufacturers, spurring companies to take a closer look at cyber insurance.

For many years, cyber insurance has been used primarily by retailers, financial services providers, and hospitals. These measures were mainly taken to protect customer information from theft. According to insurance consulting firm Advisen Ltd., in 2016, manufacturers in the United States paid $36.9 million for cyber insurance, an 89% increase from the year before. And the situation with Abbott Laboratories ABT has raised interest in cyber insurance to a new level.

The pharmaceutical industry is increasingly turning to cyber insurance, given the increasingly widespread use of cloud services, the growth of interaction with consumers through social networks, as well as the growing sophistication of hackers. According to experts, medical institutions will become one of the main targets of cyber attacks in 2017.

But the situation concerns not only pharmaceuticals - in December 2014, the Federal Office for Information Security of Germany reported that a cyber attack caused enormous damage to a steel mill. This showed that cyberattacks can be very destructive for businesses in any industry.

The beginning of the cyber insurance boom was predicted as early as 2016. It is predicted that this market will reach unprecedented scale by 2020. The Internet of Things has opened a new era of cyberattacks - by 2019, losses from cybercrime will amount to $2 trillion.

Source: Finance.UA