Call us now:
Cyber insurance looks to be between a rock and a hard place if it’s looking for cash.
The recent Marks and Spencer, JLR (Jaguar Land Rover), and Collins Aerospace hacks have demonstrated the challenges insurers face with cyber. Risk transfer and the aggregated losses that insurers face when a supplier suffers a cyber attack are uncontrollable. The M&S hack is estimated to have cost upwards of £600m. The JLR hack is ongoing, but it is costing its suppliers and employees. This week’s Heathrow hack will cost airlines and passengers globally.
These hacks create big red flags for capital markets. They highlight the complexities of cybersecurity risk management and the quick transfer of consequential losses down supply chains. The models used by Cyber Insurers to calculate losses need improvement; for example, one wonders about the costs of the JLR and Collins hacks on the insurance industry.
Cyber insurers do not have the right data to model the impact of a cyber attack on the insured. They focus on Right of Bang when they need Left of Bang data.
“Over the long term, the participation of capital market investors in bearing some of these risks will be a key element in ensuring sufficient reinsurance/retrocessional capacity and spread of risk to support traditional writers,†Moody’s explained.
One hope is that insurers and capital markets can work through how this participation will take place. Cyber is a big attack surface, and cyber insurers have made clear that the SME market is an opportunity for them, a sector that is least likely to be able to manage cyber risk. All company sizes are affected by cyber attacks; it’s just some have more free cash.
@Thaddeus Dziekanowski Brian D. McCarthy Faisal Khan
Veritas GRC
#cybersecurity #cyberriskmanagement
https://lnkd.in/e3ZXvf5F
View Original Post
https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7375778035444158464