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One always appreciates a cyber insurance industry update. Are we in a hard, market, a soft market, a stable market or one that is fluctuating? It is always difficult to tell. What reports do tell us for July is that ransomware is at record levels, both in this report and others. Threat complexity and attack severity is increasing as demonstrated by the recent Microsoft key compromise, supply chain hacks like MOVEit, or the recent attacks on CloudNordic. Threats that facilitate payload delivery directly or used in combination with other vectors to compromise a targets network.
What is clear for the insurance industry is that things are changing. The SEC final ruling is the boldest cyber risk transfer tool the insurance industry has seen. Transferring cyber risk on to the financial statements of covered entities. Coming ahead of other Federal and EU cyber regulations, it is difficult to see how the cyber insurance industry cannot improve future Loss Ratios.
That raises some questions. Will the insurance industry support its clients through the regulatory compliance process, or rely on regulatory compliance as a tool for managing pricing, reduced coverage and challenging claims? How will the industry balance up D&O insurance and cyber insurance, as failing to meet regulatory compliance is unlikely to be insurable.
The final observation is how prepared will insurers be to demonstrate their own regulatory compliance. As the SEC final ruling effects insurance registrants on U.S markets and EU DORA effects insurance firms in the EU.
Ted Dziekanowski Rachel V. Rose, JD, MBA Bob Dix
#cybersecurity #cyberinsurance #directorsandofficers
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