All risks are insurable, the question is how economic is it to insure the risk.

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All risks are insurable, the question is how economic is it to insure the risk. The answer for cyber insurance is likely not very economic.

We wrote in 2022 (https://lnkd.in/eHRxNcps) that managing cyber risk through insurance was not going to be economically insurable following traditional methods of underwriting. Underwriting cyber insurance based on loss does not work. As demonstrated by loss ratios. Also one must remember the % of companies taking out cyber insurance is less than modest.

Lloyds of London recently wrote on the systemic effects of a cyber attack. There’s not enough capital in global markets to cover losses.

This weeks charges by the SEC against SolarWinds say something about the challenges software vendors and their customers face with cyber risk. Raising concerns over the future effects of regulatory oversight. Regulatory oversight that shifts cyber risk to boards.

The insurance industry and the insured need to understand cyber risk is transferring Left of Bang through regulation. Providing opportunities to economically underwrite the risk.

Contact the Augusta Group to discuss.

Ted Dziekanowski Brian D. McCarthy Bob Dix Rachel V. Rose, JD, MBA

#paravasecuritysolutions #cyberriskmanagement #cybersecurity #cyberinsurance

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