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A great article from HBR on cyber insurance, the problems ahead for the insurance industry and a solution. 2020 has been an interesting year for cyber. COVID 19 caused a global lock down, there has been an increase in the sophistication of cyber threats, an increase in the value of ransomware and a rapid rise in insured cyber loses, up 50% in 2019.
There isn’t enough information available to accurately price the risk, cyber is a dynamic risk and complex to manage (SolarWinds), insurers cannot assess an insureds ability to predict and manage cyber risk. Cyber attacks as a single insured risk can result in significant claims (Norsk Hydro). There isn’t enough cash in premiums to cover the potential losses which a catastrophic cyber incident could cause.
The insurance industry needs a plan. It is time that the industry set the standards by which the insured manage the risk. Defining the practices required, before policies can be written. As the US DoD is doing across its supply chain with CMMC. Providing certainty to the insurer and insured that cyber risks are being managed, without which cyber risk may become uninsurable.
If the insurance industry cannot assess the risk, how can anyone else?
#cybersecurity #cyberrisk #cyber #insurance #cyberinsurance #parava #europe
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