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Banks Insure Cyber Risk But Rarely Claim

Created at 29 Jun · 3:40 AM1 source↑ Market-relevant
IN SHORT

A Risk.net study found that two-thirds of banks insure their information security risk exposure but rarely utilize these policies. Banks are also negotiating lower insurance costs and seeking capital offsets.

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Key Numbers

67%banks insure information security risk
46banks surveyed

Who's Involved

Risk.net
conducted the operational risk benchmarking study

↳ Why This Matters

This finding suggests that banks may be overpaying for cyber insurance or that the policies are not structured to adequately cover their specific risks, potentially impacting capital efficiency and risk management strategies.

Key facts

  • 67% of surveyed banks insure their exposure to information security risk.
  • Banks are actively negotiating lower insurance costs.
  • Institutions are seeking ways to offset Pillar 2 capital requirements through insurance.

A recent study by Risk.net's Operational Risk Benchmarking program reveals that while a significant majority of banks, specifically 67% of the 46 institutions surveyed, insure their exposure to information security risks, they rarely make claims on these policies. The study also indicates that these large banks are actively negotiating the cost of their cyber insurance coverage and are looking for ways to use these policies to offset their Pillar 2 capital requirements.

Frequently asked questions

The study found that two-thirds of banks insure their information security risk but rarely make claims on these policies.

Banks are aggressively negotiating the cost of their insurance and seeking offsets to Pillar 2 capital requirements.

The findings are from Risk.net's latest Operational Risk Benchmarking study.

What Happens Next

01Banks continue to review technology provisions for top operational risks.
02Further analysis of AI's role in managing operational risks is expected.

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Cadence

How It Developed

Two-thirds of banks insure their information security risk.
Banks are aggressively negotiating insurance costs.
Banks seek offsets to Pillar 2 capital requirements.

Sources

T1
Banks insure against cyber risk, but rarely claimRisk.net

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