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The Alliance report of cyber risks highlights ransomware as the biggest risk facing firms and it is still a significant risk. But I disagree. The biggest risk that organisations face is their ability to transfer cyber risk. Cyber is no longer a ‘right of bang’ problem, it is a ‘left of bang’ problem. Why?
Carriers and the insured have not yet found a solution to manage cyber risk.
1. Most organisations (95% of organisations globally are SMEs) do not have the tools to manage cyber risk – See the U.S DoD cyber program where supplier that handle CUI have to manage 110 cybersecurity practice.
2. Cyber insurers are realizing they cannot efficiently underwrite cyber as a risk – premiums are rising, coverage is falling and insurers are introducing exemption clauses, for example Lloyds of London and nation state attacks.
3. SMEs find it difficult to afford cyber insurance as a risk transfer tool.
4. Cyber attack complexity, frequency and severity is on the rise. For example moving from IT to OT.
5. Cyber regulations are being proposed in the U.S and EU, forcing cybersecurity across supply chains. – U.S DoD, SEC, EU NIST 2.0, DORA, EU CRA.
My contention is the biggest risk to organisation and insurers is the ability to manage the risk ‘left of bang and the insured and insurers not having solutions to manage cyber risk by the insured and insurers. For Example the re-insurance market is $650Billion, what is the aggregated cost to taking a cloud provider off line, or switching off connected cars due to poor cloud security.
Ted Dziekanowski
Gerry Kennedy
Alexander Rae ACII
#cybersecurity #cyberriskmanagement #cyberinsurance #theaugustagroup
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