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Cybersecurity is a conundrum……………..
Cyber attacks are on the rise, if correct 2024 presents a 30% y-o-y increase in cyber attacks; Technological innovation has leapt out the gates with the introduction of AI, a tool being used by threat actors to develop and launch attacks; There’s a lack of skills and knowledge in the board room to effectively govern cyber; The introduction of cyber regulation requires covered entities demonstrate the management of cyber, at risk of civil and criminal penalties.
All have a profound effect on insurance companies and the insured. Why? Cyber is a risk transfer problem for both boards and insurance companies.
1. Cyber regulation transfers cyber risk Left of Bang(LoB), into the board room.
2. Cyber insurance is focused on Right of Bang(RoB) and doesn’t cover all costs (the coverage gap).
3. There are few alternatives to managing cyber risk. You can Self Insure (now being driven by regulation LoB), or insure against the incidents (RoB).
With the introduction of cyber regulation boards and insurers need to find a solution to the risk management equation.
How does this play out with the insured? Speaking with a colleague recently, it was pointed out that boards still do not see the challenges ahead. This an opportunity for insurers to have a broader risk transfer conversation, as arbiters of risk management?
The buck stops with the board; a buck that may come with civil and criminal penalties attached.
@Thaddeus Dziekanowski Brian D. McCarthy Faisal Khan
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberregulation
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