Cyber insurance has been relied upon as a significant and predominant risk transfer tool for companies for years.

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Cyber insurance has been relied upon as a significant and predominant risk transfer tool for companies for years. However, insurers have implemented exclusion clauses and caps to manage their exposure. At the same time cyber attacks have increased in frequency, complexity and severity of impact. In part due to the poor levels of cybersecurity risk management by the insured.

The cyber insurance industry faces a problem, if it wants to grow GWP. It requires liquidity for reinsurance and regulatory capital. The insured also faces a problem that is discussed in the enclosed. How to cover the gap between the amount insured and the total cost of the losses incurred by a cyber attack.

Both the insured and insurer face a further problem, and that is cyber regulation. Cyber regulation is a risk transfer tool for covered entities. It transfers risk management to the boards of covered entities. It provides insurers with the opportunity to improve the underwriting of cyberinsurance and D&O policies.

Both the insurer and the insured may benefit, as the ‘regulated’ management of cyber risk and risk transfer could reduce the coverage gap.

@Thaddeus Dziekanowski Brian D. McCarthy

Veritas GRC

#cybersecurity #cyberriskmanagement #cyberregulation #cyberinsurance

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