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A great read from Helen Thomas on the challenges UK corporates face with cyber risk, cyber insurance, and the need for the insurance industry to support clients transfer risk.
The corporate world is in difficult position, cyber is to complex a risk for cyber insurance to manage alone. The cost, complexity, frequency and severity of cyber attacks has overtaken the ability of the cyber insurance industry to provide efficient risk transfer solutions. Cyber insurance premiums are increasing, coverage falling, exclusion clauses being introduced, and there is an acceptance that cyber is a very real national security issue.
Add to this many corporates have no strategy or resource to manage the risk and the corporate world has a rude awakening ahead, as the risk transfer equation is changing. While cyber insurance is important it is one part of the risk transfer equation. A significantly bigger issue for corporates is cyber regulation, and the volumes coming from the U.S, EU and APAC.
The White House ONCD cyber strategy is immanent (Chris Inglis has stated publicly that market forces have failed to address cyber risk management and regulation is needed), the SEC cyber proposal is due, the EU added NIS 2 and DORA to the European Journal in January and the Australians are moving ahead with cyber regulation. With more cyber regulations planned.
Cyber regulation transfers cyber risk management to the balance sheets of corporates. It places cyber on the board table requiring directors to attest their skills and experience to manage cyber risk, attest their organisations compliance and report cyber incidents. With significant personal and corporate legal and compliance risks attached, including civil and criminal liabilities. Compliance that was being tested in U.S courts in 2022 (Uber, Drizly, Mondelez, Aerojet Rocketdyne, CHS)
If UK covered corporates want to trade with the U.S or EU, they will have to make compliance choices. Making the risk transfer equation a problem corporates and the insurance industry will have to get a grip of.
Ted Dziekanowski
#cybersecurity #cyberriskmanagement #cyberinsurance #theaugustagroup #cyberegulation #cyberlaw
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