Number of parent companies using captives cyber risk doubles: Aon

The use of captives to insurance against cyber risk has doubled since 2015, according to Aon’s Global Risk Management Survey 2019.

Captive utilisation for cyber risk was 16 percent in 2019, up from 12 percent in 2017 and 8 percent in 2015.

Aon suggested this represents a relatively low number of captives, but that the growth rate has "certainly accelerated".

"The overall trend of captive participation in cyber coverage across the globe is predominantly in line with the 2017 predictions for 2022," the report said. "As organisations are becoming more sophisticated buyers of cyber risk insurance, opportunities for captive insurance companies to participate in a complex program will continue to increase."

According to the report, there appears to be a positive correlation between the upward trending of cyber risk assessments and quantitative techniques and the increase in captive utilisation and insurance procurement.

Cyber risk was ranked number six in Aon's survey, having been number five in 2017. Aon suggested this could attributable to a number of factors, for example the elevation of other risks that are the result of an "increasingly volatile geopolitical and economic climate" or due to "cyber fatigue", which is a result of the continued emphasis on security, auditing, privacy regulations and media coverage.

"If companies are suffering from cyber fatigue, this would be disconcerting because the number of companies that are claiming cyber-related losses has doubled since 2015," the report warned.