A recent survey of senior private equity professionals found that only 23% of them describe the due diligence that private equity firms carry out on cybersecurity issues of target companies as “good” or “excellent”.
Commissioned by Mactavish Group, the research reveals that 30% of the private equity professionals interviewed describe the industry’s work here as “average”, with 27% saying it was “poor” or “terrible”. Mactavish Group, the UK’s leading independent expert on insurance placement and disputes, has been operating in the commercial insurance sector for over 15 years.
Despite these findings, there is reason for optimism, as the research also suggests future potential improvements. Indeed, 83% of those surveyed expect private equity firms to insist that their portfolio companies all have specific cyber insurance policies in place within the next three years.
Regarding private equity firms purchasing cyber insurance for their own operations, 53% of industry professionals interviewed said they believe that the industry is focusing more on this issue.
The reasons given for not securing appropriate cyber insurance were varied. Just over a quarter of those surveyed (27%) said that cover is too expensive in relation to the risks they face in this area. The same proportion said that the cyber risk exposure faced by the private equity sector is not serious enough to require insurance. Of those interviewed, 13% said it’s difficult to find the desired cover.
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