A fast maturing market but take-up remains low

Cyber insurance in Spain. Interview of “Commercial Risk Europe” with Juan Aznar Gáldiz.

Juan Aznar Gáldiz, managing director of HDI Global in Spain, said that awareness of the critical nature of cyber risk is rising. Corporate risk managers and cyber insurance both have a central role to play to protect business, he added.

HDI Global is focusing cyber efforts on its core industrial customers. Mr Gáldiz told Commercial Risk Europe in an interview as sponsor of this year’s European Risk Frontiers Survey, that “more and more” Spanish industrial companies have recognised that cyber risks are a growing security problem.

“The digitalisation and integration of their manufacturing facilities offer huge opportunities for cyber attacks. Such an attack on a company is capable of causing financial losses and property damage. It can also lead to production shutdowns at all locations, with repercussions for supply chains and business partners. Against the background of such a complex risk scenario, we believe the ideal person to deal with these challenges within a company is the risk manager,” he said.

The insurer said that small and medium-sized (SME) companies that lack in-house resources to set up sophisticated cyber strategies can benefit from a cyber insurance policy. But he pointed out that the coverage needs to include precautionary assistance and advisory services for professional support, such as forensic investigations, public relations and data recovery.
Mr Gáldiz said the Spanish market has many SME companies that can benefit from the support and advice of brokers and industrial insurers.

“Large companies have their own IT experts, risk managers and other specialists who can deal with these cyber challenges or solve cyber problems once they occur. However, companies in the SME segment often don’t have IT engineers and risk engineers, [so] it is even more important for them to have access to external experts on standby in the event of a cyber crisis. By the way, this is actually a very cost-efficient way of dealing with cyber risks within a company,” he said.

Mr Gáldiz believes the cyber market is maturing fast and that about 60% of potential cyber risks can be covered by insurance products.

“Nevertheless, we have to bear in mind that insurance cover for cybercrime cannot provide a client with a completely watertight solution. Insurance should always complement technical and organisational protective measures undertaken by a customer,” he said.

“More important, however, is the question as to how many Spanish companies have bought a cyber policy. I would estimate not more than 5% of Spanish companies. This shows us that there is still a lack of awareness among many managers and companies,” he added.

Generally speaking, there is no problem as far as cyber capacity is concerned, according to Mr Gáldiz.

“If a Spanish company from the manufacturing industry wants to buy a cyber policy today, it can choose between several different offers. However, there are exceptions to this rule. In some sectors such as the banking and internet industries, the market still needs to find a proportionate relationship between risk and premium,” he added.

This text was first published by Commercial Risk Europe. Publication on this website by courtesy of Commercial Risk Europe