# Aon/Ponemon report: Almost four times more budget is being spent on property related risks vs. cyber risk
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-04-26
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Cyber Risk Transfer Comparison Global Report 2017 Findings
Meta Description: Discover the latest insights on cyber risk exposure, asset valuation, insurance trends, and more in the 2017 Cyber Risk Transfer Comparison Global Report by
URL: https://financedigest.com/aonponemon-report-almost-four-times-more-budget-is-being-spent-on-property-related-risks-vs-cyber-riskhtml

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Nearly 65 percent of organizations expect their cyber risk exposure to increase in the next two years

-  The impact of business disruption to cyber assets is 72 percent greater than to property, plant and equipment (PP&E) assets
-  Organizations valued cyber assets 14 percent more than PP&E assets
-  Quantification of probable maximum loss from cyber assets is 27 percent higher than from PP&E
-  Organizations insure on average 59 percent of PP&E losses, compared to an average of 15 percent of cyber exposures

The 2017 Cyber Risk Transfer Comparison Global Report, released today by the [Ponemon Institute](http://www.ponemon.org/), a leading research firm on privacy, data protection and information security, and sponsored by [Aon plc](http://www.aon.com/default.jsp) (NYSE:AON), found that organizations now believe that their cyber assets are more valuable than plant, property and equipment assets, even though they are spending four times more budget on insurance protecting the latter risks.

This unique [cyber study found a serious disconnect in risk](https://www.financedigest.com/using-threat-intelligence-to-minimise-cyber-insurance-risks.html "Using Threat Intelligence to Minimise Cyber Insurance Risks") management,” said Dr. Larry Ponemon, [chairman and founder](https://www.financedigest.com/lear-capital-founder-and-chairman-kevin-demeritt-on-inflation-now-and-then.html "Lear Capital Founder and Chairman Kevin DeMeritt on Inflation: Now and Then") of the Ponemon Institute. “What’s interesting is that the majority of companies cover plant, property and equipment losses, insuring an average of 59 percent and self-insuring 28 percent. Cyber is almost the opposite, as [companies are insuring](https://www.financedigest.com/building-stronger-relationships-with-insurance-companies.html "Building Stronger Relationships With Insurance Companies") an average of 15 percent and self-insuring 59 percent.

While the majority of surveyed respondents find that cyber insurance is inadequate to meet the needs of their organization, too expensive and has too many exclusions, 46 percent of respondents reported a [data breach](https://www.financedigest.com/amazons-twitch-blames-configuration-error-for-data-breach.html "Amazon’s Twitch blames configuration error for data breach") in the last two years with the average financial impact costing $3.6 million. Based on data breaches and security exploits experienced by the surveyed organizations, the greatest threats are business process failures that caused disruption to business operations as well as [cyber attacks](https://www.financedigest.com/lloyds-of-london-investigates-possible-cyber-attack.html "Lloyd’s of London investigates possible cyber attack") that caused disruption to both business and IT operations. Looking ahead, 65 percent of organizations expect their [cyber risk](https://www.financedigest.com/minimising-supply-chain-cyber-risks-by-asking-the-right-questions.html "MINIMISING SUPPLY CHAIN CYBER RISKS BY ASKING THE RIGHT QUESTIONS") exposure to increase in the next two years.

This study compared the relative [insurance protection](https://www.financedigest.com/how-to-choose-the-best-income-protection-insurance.html "How to Choose the Best Income Protection Insurance") of certain tangible versus intangible assets,” added Kevin Kalinich, cyber/network global practice leader, Aon Risk Solutions. We have found that most organizations spend multiples more premium for [fire insurance](https://www.financedigest.com/britain-proposes-insurance-shake-up-after-grenfell-tower-fire.html "Britain proposes insurance shake-up after Grenfell Tower fire"), for example, than for cyber insurance, even though they state in their publicly disclosed documents that a majority of the organization’s value is attributed to intangible assets.

Aon’s 2017 Global Risk Management Survey also found that [cyber](https://www.financedigest.com/automated-cyber-risk-quantification-saving-the-insurance-industry.html "Automated Cyber Risk Quantification: Saving the Insurance Industry") risk is a top concern for most businesses in the U.S. and globally. As a result, many [companies are implementing formal assessments](https://www.financedigest.com/liquidity-ratios-assessing-a-companys-short-term-financial-health.html "Liquidity Ratios: Assessing a Company’s Short-Term Financial Health") to identify and measure their cyber risk. While this risk is being recognized as a significant threat, it is often not properly managed on a relative basis compared to other [growing assets and risk](https://www.financedigest.com/markets-pricing-some-geopolitics-but-risk-premia-can-grow-further-goldman.html "Markets pricing some geopolitics, but risk premia can grow further -Goldman"). This is having an impact on many companies’ [bottom lines](https://www.financedigest.com/how-high-performers-can-increase-a-bottom-line.html "How high performers can increase a bottom line").

**Additional Findings**

- Sixty-three percent of companies that experienced a data breach in the last two years are now more concerned than before about their cyber liability.
- Eighty-two percent of companies have access to [cyber security](https://www.financedigest.com/how-to-handle-cyber-security-during-mergers-and-acquisitions.html "How to Handle Cyber Security during Mergers and Acquisitions") forensic experts in the event of a data breach.
- Thirty-six percent of respondents say their organizations do not have to disclose a [material loss](https://www.financedigest.com/basic-material-luxury-stocks-drive-european-shares-to-a-third-day-of-losses.html "Basic material, luxury stocks drive European shares to a third day of losses") that is not covered by insurance in their financial statements, but if they do, 41 percent of respondents say they would include it in a footnote of a financial report.
- Seventy-one percent of survey respondents are either somewhat or not at all aware of the economic and legal consequences of upcoming regulations, such as the European Union General Data Protection Regulation (GDPR).


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