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In ones view the cyber and D&O insurance industry faces a problem. Namely where is it going to get the cash to handle claims and regulatory capital, if it expects to grow GRW premiums to the much reported figures?
As the industry looks to find ways of ‘Risk Transfer’ through a range of tools that includes ILS (that one believes is a bad idea).
‘the capacity available in the traditional reinsurance market is “far from sufficient†to support such growth, and therefore, reinsurance companies active in this field have been “trying for years†to establish special risk transfer programmes.’
How about cyber insurers (and D&O) consider the other risk transfer tool that is almost guaranteed to be a success, carries little risk for the insurance industry and is already on the market? The risk transfer tool that is cyber regulation (yes we’ve talked and written about it allot).
Cyber regulation transfers the risk of cybersecurity risk management into the boardroom and onto the financial statements of covered entities, through regulatory compliance. It is required by a growing list of companies; being implemented by regulators globally; it effectively removes insurers from the risk management equation; reduces their risk exposure and if managed by the insurer properly will grow GWP. Covered companies have to demonstrate their management of cybersecurity risk and compliance. Compliance data that cyber insurers should be using to write cyber and D&O insurance policies.
‘Left of Bang’ cyber risk transfer, please reach out if you want to know more?
@Thaddeus Dziekanowski Brian D. McCarthy Rachel V. Rose, JD, MBA
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberregulation #cyberinsurance
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