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Thank you for posting Corey Munson. The challenge for the insured is invariably they do not know what they are paying for; the exposure that a cyber attack creates for their organisation, and whether or not they will be able to rely fully on the product in the event of a successful cyber attack. In ones opinion this has historically been the fault of the insurer and the insured and comes down to the maturity of the market and the small print.
Cyber insurers have rushed to the top line, with little understanding of the effect of cyber on loss ratios, and the insured have made assumptions that insurers will pick up losses at the expense of managing cyber risk. As we have seen with insurers realizing rising loss ratios, reduced coverage and exclusions.
Unfortunately both are now starting to understand the challenges with underwriting and claiming against cyber policies. Both the insured and insurer owe it to each other to create transparent products that are fit for purpose. That will require both to have a clear understanding of their responsibilities.
With the introduction of cyber regulation one expects the insured to have a much harder time managing cyber compliance. With cyber insurers finding it much easier to challenge and dismiss claims in view of regulatory compliance. One suspects we will see many more cases reaching court before both sides understand what and how to manage cyber risk.
Ted Dziekanowski
#cyberinsurance #cybersecurity #cyberriskmanagement
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