Cyber Attacks on UK Retailers Highlight Importance of Cyber Insurance Policies

Cyber attacks on major UK retailers such as Harrods and the Co-op have highlighted the importance of having cyber insurance policies in place. Unlike Marks and Spencer, which had a cyber insurance policy arranged by WTW, covering up to £100m, the two retailers did not have such coverage. As a result, they may be liable for any losses incurred. The attacks, which occurred in April and May, demonstrate the growing threat of cyber attacks on retailers and the need for adequate insurance coverage.

Key Takeaways:

• Harrods and the Co-op did not have cyber insurance policies in place when they were attacked by hackers, unlike Marks and Spencer, which had a policy covering up to £100m.
• Marks and Spencer is preparing to claim as much as £100m from its cyber insurance policy, arranged by WTW, with Allianz and Beazley as primary carriers.
• The cyber insurance market has softened in recent months due to an increase in capacity and a slight dip in claims, but experts believe that recent attacks may drive increased demand for cyber insurance.
• UK cyber claims decreased by 20% in 2024 but remained approximately one-third higher than 2020, 2021, and 2022, according to insurer broker Marsh.
• Experts believe that insurers will need to ask more questions when offering coverage due to the increased risk of cyber attacks.

Statistics:

• Cyber attacks on major UK retailers such as Harrods and the Co-op may result in losses of up to £300m, as estimated by Marks and Spencer.
• Marks and Spencer's cyber insurance policy covers up to £100m, with Allianz and Beazley as primary carriers.
• UK cyber claims decreased by 20% in 2024, but remained approximately one-third higher than 2020, 2021, and 2022.
• Cyber insurance market capacity has increased, leading to softer premiums and a slight dip in claims.

Sources:

• Insurance Insider
• City AM
• Marsh
• Kennedys Law Firm
• WTW
• Allianz
• Beazley