#CyberFLASH: Low interest rates and cyber crime top concerns for Canadian insurers

numbersLow interest rates and cyber risk are among the top three concerns for Canadian insurance companies, according to a survey released Wednesday by the Centre for the Study of Financial Innovation in association with PwC.

The survey, which was released the same day the benchmark overnight rate was cut by the Bank of Canada for the second time this year, says low interest rates are forcing insurers to focus on product and pricing changes “often at the cost of product innovation.”

The central bank hopes to stimulate economic growth and keep Canada out of a full-blown recession with the latest cut of the overnight rate to 0.50 per cent from 0.75 per cent.

Insurers around the world are worried about the impact on their business from low interest rates, but cyber security emerged a larger worry for Canadian insurers than their global counterparts, climbing to the second-highest risk behind regulation.

Many Canadian players, who are among the biggest international operators in the sector, believe a data breach “is not a matter of if but when,” said Chris Couture, PwC Canada’s national insurance leader.

“It is no surprise that, given the scale of their operations and rich data holdings, cyber security emerged this year as a top concern,” he said.

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