It’s an obvious statement worth repeating, cyber insurance is an important tool for any company wanting to mitigate the effects of a cyber attack.

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It’s an obvious statement worth repeating, cyber insurance is an important tool for any company wanting to mitigate the effects of a cyber attack. But are cyber insurers ‘chasing the dragon’, as we see a decline in direct written premiums in 2023, following a 160% increase from 2020 – 2022, according to Fitch ratings?

It raises an interesting question of why? Cyber attacks are increasing, the effects are visible and will only continue to get worst as digital risk increases. According to Fitch, cyber has been a profitable business, with average direct loss and defense and cost containment ratio of 55%. Likely due to coverage caps and exclusion clauses. The average cyber claims payment closed in 2023 was $186,000.

But with cyber regulation now in the back yard of organisations. Cyber loss risk is rising for covered companies, that have to demonstrate to regulators that they can manage cybersecurity risks and incidents. Or face the possibility of civil or criminal penalties; and the possibility of reduced cyber and D&O insurance claims payments.

“Cyber loss risk is also affected by expansion in regulatory and compliance requirements that increase potential for litigation risks and substantial fines and penalties for not properly disclosing data breaches.”

Cyber regulation transfers cyber risk ‘Left of Bang’, complementing cyber Insurance.

@Thaddeus Dziekanowski Brian D. McCarthy

Veritas GRC

#cybersecurity #cyberriskmanagement #cyberregulation

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