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An interesting article on cyber insurance. With underwriters saying they need more data to accurately model and underwrite the risk.
In my opinion cyber risk bares no relation to most traditional insurance risks. Cyber is systemic in nature, the speed, breadth and depth of impact varies depending on the attack vector. Cyber is as predictable as the threat actor, their motivation and the vulnerability of the target. Attacks can be global, local or both. They are geopolitical, criminal, societal, targeted and opportunistic in nature. They impact governments, corporates and individuals. With all of these in combination.
Natural disasters are global, yet local. Earth quakes and hurricanes are geographically local events, but globally spread. Hurricanes can be predicted to a degree of certainty and impact. With historical data to help model the risk.
It will take time to be able to develop models which can withstand testing. But the impact of cyber can be modelled, switch off the lights in a country, switch off a bank, supply chain company, or data centre, model the impact.
I’ve put in place cyber insurance across companies big and small. It is a useful risk transfer tool, as a backstop to mitigate cyber. But use it as the only tool, at your peril.
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