Intangible Assets Impact Report, EMEA Edition
2022 Intangible Assets Financial Statement Impact Comparison Report | EMEA Edition
Pandemic-induces acceleration of business value towards digital intangible assets, with organisations often unsure how to protect these growing assets.
Sponsored by Aon. Independently conducted by the Ponemon Institute.
Publication date: April 2022
Intangible assets versus tangible assets
Potential losses related to intangible assets (data, intellectual property, computer systems and other specified digital assets) range from evolving perils including cryptocurrency fraud, computer system disruptions and intellectual property misappropriation. How do these compare to potential losses related to tangible assets (property, plant and equipment) from traditional perils such as fires and weather? And how are organisations using insurance to protect these different types of assets?
The protection gap
Our research indicates companies value intangible assets higher than their tangible assets.1 But tangible assets, despite their lower value, are insured to a much greater extent - 58 percent compared to just 16.6 percent, even though cyber liability and intellectual property risks rank in at least the top 10 of all business risks facing companies – and, more often than not, as a top three risk.
What can organisations do?
This research aims to provide a better understanding of the relative financial statement impact of digital asset and intellectual property losses, to help organisations make better decisions.
It provides insights which may help companies allocate resources and determine the optimal amount of risk transfer, including insurance, to mitigate the financial statement impact of intangible asset losses, and potentially increase the value of their underlying intangible assets.
Key findings from the report show:
- The increased value of, and reliance upon, intangible assets, including information assets and intellectual property
- Companies value their intangible information assets higher than their tangible PP&E assets, but insurance coverage is higher for their PP&E assets, even though the value of Probable Maximum Loss is higher for information assets than for PP&E
- Nearly half (46 percent) of companies say they are covered for third-party infringement of their company’s IP assets and that it will pay for them to fund litigation. In reality, it is likely to be less than 1 percent of businesses who have that coverage
- While there has been an increase in cyber ransomware business interruption losses relative to historical data breach privacy losses, only 32 percent of respondents say their companies currently have cyber insurance coverage
- The benefits of insuring cyber assets and intellectual property providing both financial protection from losses and leverage to increase the value of the organisation
Read the report for the full, in-depth analysis:
About this research
The consolidated sampling frame is composed of 61,073 individuals located in North America, Europe, the Middle East, Africa, Asia Pacific, Japan and Latin America. Respondents are involved in their company’s cyber risk management as well as enterprise risk management activities. 2,671 respondents completed the survey, of which 290 were rejected for reliability issues. The final sample consisted of 2,381 surveys.
The average total value of PP&E is approximately $1,109 million for the companies represented in this research. The average total value of information assets is slightly higher at $1,213 million. 1
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