Thanks for posting Ted Dziekanowski. I’m not convinced that cyber insurers have a better understanding of cyber risk.

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Thanks for posting Ted Dziekanowski. I’m not convinced that cyber insurers have a better understanding of cyber risk. The risk is to complex for insurers to underwrite effectively, as they don’t have any meaningful data on their clients risk exposure.

I expect that the market looked hot before insurers realized how difficult it would be to manage and increased premiums, lowered coverage, added nation state exclusions and lessons learnt about cyber incidents. The result has been that cyber insurers are transferring more cyber risk back to the insured, and the insured is not prepared to manage it. One suspects that this accounts for the stabilization of the market. Organisations that do not take up cyber insurance will be have to manage the risk and this will create a problem for society. It also increases aggregation losses for the reinsurance industry.

As the U.S and EU regulate cyber it will demand that organisations meet cybersecurity standards and enable insurers to price cyber. But it will be dependent upon the insured having to comply with cyber regulation. Unless the cyber insurance industry finds a way to enable cybersecurity compliance in its clients.

Gerry Kennedy

#cyberinsurance #cyberriskmanagement #cybersecurity #cyberlaw

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