Based upon Marsh’s data, more companies are purchasing cyber insurance (36% of U.S clients in 2022, vs. 33% in 2020).

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Based upon Marsh’s data, more companies are purchasing cyber insurance (36% of U.S clients in 2022, vs. 33% in 2020). There is a rise in the number of captives, Marsh managed captives writing cyber insurance increased by 75% between 2020 and 2022. However ransomware claims are up 77% from Q4 2022 to Q1 2023 and data related claims up 85% over the same period.

The effect of cyber exclusion clauses has not yet been felt ‘right of bang’, and the regulatory response through the U.S and EU is still being formalized ‘Left of Bang’. Uncertainty around exclusion clauses maybe preventing take up and Cyber regulation will transfer risk from cyber insurance to financial statements. At a time when Cyber attacks are increasing in frequency, severity and complexity.

The question is, what next for cyber risk transfer? Direct and aggregated losses are a challenges for the cyber insurance and reinsurance market and I am not hearing of any solutions. While the article points out Captives are on the rise, cyber creates the same risk management challenges. What is the effect on regulated and unregulated public firms in the U.S and EU?

Ted Dziekanowski

#cyberinsurance #cyberriskmanagement #risktransfer #cyberregulation

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