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A very important report by the Federation of European Risk Management (FERMA) on the risks and issues its members have highlighted with cybersecurity and cyber risk. It is starting to highlight the cracks in the cyber insurance model, as persistent doubts are raised by EU risk professionals on the effectiveness of cyber insurance.
1. Exclusions: Particularly for war and systemic risks, as well as the exclusion of cyber risks from traditional policies (e.g. property and business interruption), amid perceptions that (re)insurers are moving toward broader exclusions.
2. Coverage gaps: Arising from the interaction between disparate traditional insurance policies and cyber-specific policies.
3. Claims management: Especially around unclear triggers and frequent disputes over claims payments.
4. Low penetration rate for certain companies, specifically SMEs.
The report balances the need for cyberinsurance, playing an important role in risk transfer, but not as a substitute for cybersecurity. But part of an organisation’s risk management program, sitting alongside cyber regulatory compliance and the proactive management of cyber risk.
We’ve been saying this for years: the insurance industry will not be able to address SME penetration, close the coverage gap, and place assurance over claims until it accepts that cyber is a left-of-bang problem. A problem that requires compliance with the same standards as cyber regulation.
@Thaddeus Dziekanowski Brian D. McCarthy Faisal Khan
Veritas GRC
#cyberinsurance #cyberriskmanagement
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