Skip to main content
Article | Decode Cyber Brief

Decode Cyber Brief: Employee negligence, malfeasance attributable to more than half of cyberinsurance claims

Claims|Risk & Analytics|Cyber Risk Management|Insurance Consulting and Technology

March 1, 2018

A bi-annual publication featuring the latest trends in managing people, capital and technology risks related to cybersecurity across your enterprise.


It is with much excitement that we present our Decode Cyber Brief. Last winter, we introduced the inaugural Willis Towers Watson “Reported Claims Index,” a sampling of cyber claims representing different industries, incidents, severity and loss amounts of a five-year period. Because cyber threats are dynamic, we have concluded that, to provide our clients with critical insights on claim trends, there is greater value in analyzing the data annually. To that end, for this edition, we have aggregated and analyzed data from approximately 225 cyber claims that we reported to insurers on behalf of our clients during 2017.

As shown in the chart below, the human element remains an overwhelming cause of cyber risk, with a staggering 58% of the claims included in this year’s Reported Claims Index directly attributable to employee negligence and/or malfeasance (see chart). Significantly, the percentage of hacking claims was 23%, which can be attributed to a number of factors, including: (1) increased sophistication of hackers; (2) failed technology; and (3) human error, such as the failure of an employee to deploy available patches (e.g., WannaCry incident). The consistent and important observation in all of the claims remains that, while technology is a critical component of cyber risk management, the crux of the majority of these claims is human error. As such, in addition to improving technology defenses and risk transfer strategies, organizations are advised to continue allocating sufficient capital to employee training and talent strategies (to address skill-related vulnerabilities) in order to drive a cyber-savvy workforce and resilient enterprise.

Willis Towers Watson Reported Claims Index

Type Percentage
Employee negligence or malfeasance-Accidental/Lost/Rogue 58%
Hack 23%
Social Engineering 10%
Denial 7%
Unknown 2%

The articles in this edition cover some of the recent and emerging cyber trends, which are supported by the Reported Claims Index. Please enjoy our Decode Cyber Brief and, as always, we look forward to your comments and feedback.

Table of contents

  1. Could organizations deemed 'too big to breach' face more stringent cyber regulations?

    By Dan Twersky

    Similar to the regulations financial institutions face following the 2008 financial crisis, U.S. and E.U. regulators are considering stricter regulations for organizations that are critical to the nation's infrastructure. Read the article

  2. Emerging cyber risk: Intellectual property theft

    By Jason Krauss

    The risk of intellectual property (IP) theft is on the rise, weighing heavily on corporate decision makers. Safeguarding intellectual property requires a holistic approach by implementing a cyberinsurance policy, technological defenses and employee training. Read the article

  3. Estimating business interruption loss due to a cyberattack: Best practices

    By Mark Gallagher

    Business interruption claims are likely to grow as malware or ransomware become more sophisticated. A strategy for minimizing, estimating and calculating damage from business interruption due to a cyber breach should be a proactive part of every organization's cyber incident response plan. Read the article

  4. Here comes the next wave of cyberinsurance buyers

    By Heather Wilkinson

    Costs associated with cyberattacks impact all industries, even those that appear to be low risk. As cyberinsurance products continue to evolve, those who may have brushed aside the idea of purchasing cyberinsurance in the past now consider it a key component in a well-designed risk management strategy. Read the article

  5. Software as a service, 'Internet of Things' supercharge risk for technology companies

    By Jeff Schermerhorn

    Technology companies face more complex risk management challenges as they have evolved from primary provider of hardware and software to on-demand service providers. The expansion of IoT devices and cloud solutions call for proactive realignment of risk management strategies to align with new potential threats. Read the article

Contact Us