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Cyber insurance requires a new approach, without a doubt. But is a backstop one answer. One only has to look at the recent attack on United health and its effects across the U.S healthcare industry and the ratcheting up of cyber attack frequency, complexity and severity of impact. To raise real concerns with Federal Government being involved in picking up the pieces of a catastrophic cyber attack. The message it would send to industry if U.S tax payers are the ones to foot the bill of a catastrophic event over and above that of the insurers and reinsurers.
Terrorism Risk Insurance Program and National Flood Insurance Program are excellent examples of backstops. But are different in every respect to cyber insurance. They can either be predicted, their impact is to a greater degree localized, or they could to a degree be managed. While there are consequential losses associated with both, they do not reach as far as those of cyber. For example, the consequential losses of a power outage would be what?
United health is a great example of why a back top does not or would not work. The American Healthcare Association has confirmed that 94% of hospital in the U.S were effected by the attack. The financial impact of the attack is a concern, the bigger concern if the number of those that have been effected.
There’s a very simple question that one does not get an answer to. ‘Why is the insurance industry and Federal government not adopting the same approach to cyber, as it adopts for every other insurance class?’
An approach that is being driven by cyber regulation. That is simply one of, demonstrate to me that you are managing the risk to an adequate level, and we will insure you. Will the insurance industry accept that cyber risk has to be managed ‘Left of Bang’, and insurers and the insured have to work together to demonstrate cyber risk transfer has been managed.
@Thaddeus Dziekanowski Brian D. McCarthy
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberinsurance
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