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Valuing cloud risk proves a challenge for insurers
24/05/2012
Insurance companies are finding it difficult to put a price on cloud computing risk, according to the chief executive of the Dublin International Insurance and Management Association (DIMA).
In an interview with the Financial Times, Sarah Goddard said she believes that cloud providers “still have a lot of questions to answer” in regard to data segregation and audit trails.
The use of cloud computing, where businesses access applications, data and software over the internet, has become an increasingly mainstream feature of many businesses.
However insurance broker Bluefin has warned of the potential dangers of ‘cloud computing’ as new research reveals the average cost of cyber crime has risen 56 percent in the past year from £2.4m to £3.8m.
DIMA has 66 members which represent international insurers based in Ireland and holds sensitive competitive information. As a result, Ms Goddard has been reluctant to take advantage of cloud services.
“Cloud computing is the way forward for a lot of companies, but we have to be very careful to defend the integrity of our members’ data,” said Ms Goddard.
If businesses do choose to sign up to the cloud, she said, thorough testing of provisions to protect sensitive data should be undertaken.
“There are cyberliability products out there, but they are primarily concerned with hacking,” she said, suggesting that this reflects insurers’ struggle to put a value on cloud risk.
Recent research suggests that the overall UK cloud computing market will rise in value from £5.8bn in 2010 to £10.4bn in 2014.
For more information about business insurance visit www.bluefingroup.co.uk
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