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Gerry Kennedy this is a great question for a Sunday from the Actuarial community, with a balanced answer.
Should states help with cyber risk?
One believes the answer in the short term is a resounding NO, but it could be if it is carefully considered and supported by ‘Left of Bang’ risk transfer.
As the article points out
1. A state backed insurance back stop would reduce the effect of market forces (we’ve been saying this for the past 2 years).
2. Liabilities would out way the societal benefits.
3. A backstop would create a moral hazard (Gerry you’ve been saying this for years).
This article is balanced and well worth a read if you are a cyber professional, insurer or a State considering the insurance back stop. Cyber presents opportunities to the insurance industry as we have argued for many years. Cyber risk management is a regulated requirement for some covered entities in the U.S and soo to be in the EU under NIS 2 and DORA. Cyber regulation transfers risk into board rooms, and insurers should be prepared to help boards understand and manage cyber risk.
Financial back stops work when they are a last resort, the same is true for insurance.
An activity we at Veritas GRC have been diligently working on.
@Thaddeus Dziekanowski Brian D. McCarthy Faisal Khan
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberinsurance
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