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A nice article on the opportunities for insurers to support clients transfer cyber risk.
The problems for the insured and insurer are risk transfer, regulatory capital and reinsurance capital. That all leads to an increasing coverage gap, and one is not hearing about any solutions to reduce it.
The 99% problem is a significant issue to crack for everyone, not just insurers. With 99% of businesses being small to medium size, managing cyber risk is a volume game for insurers. But one where there is unlikely to be enough capital to fulfil claims. Either profitably for insurers, or enough capital to cover the risk transfer gap for the insured, in the event of a major cyber attack.
As the article points out the insurance industry has been a facilitator for change across many industry sectors e.g. the automotive sector. ‘In the 1980s, despite objections from automobile manufacturers, the insurance industry took the U.S. Federal Government to the Supreme Court to make the installation of airbags a legal requirement in every new vehicle.’
So what about the the insurance industry and cyber insurance? Cyber risk is being transferred into the board rooms of covered firms through cyber regulation. If supported to comply, then the insured’s coverage gap reduces through regulatory compliance. Benefiting the insurers.
Cyber insurers hold the metaphoric keys to the kingdom. So what is the solution Ted Dziekanowski, Brian D. McCarthy, Rich Waite, M.Ed., George Sawyer?
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberregulation #cyberlaw
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