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The U.S Insurance Information Institutes (Triple I) report published 02.07.24 is an interesting read in setting out the challenges the cyber insurance industry and those it insures face with cyber. As with all reports we have to use the figures presented as indicative.
An issues brief published by the Triple I highlights some of the challenges and opportunities ahead for cyber insurance.
1. Data breach costs are increasing, while cyber budgets remain tight. Increasing the coverage gap.
2. 2023 is likely to break previous records for recorded cyber breaches. Cyber attack frequency complexity and severity of impact continues to increase.
3. Opportunities emerge for organisations to ‘shift left of bang’. Some covered firms are required to demonstrate cybersecurity risk management regulatory compliance.
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GWP for cyber are predicated to increase to $23 billion by 2025, growth that relies heavily on (Re)insurance capital. Coming at a time when insurers are reviewing and fortifying policy wording, there is little in the way of a visible strategy, for the insurance industry and the insured to manage cyber risk. With insurers focused on ‘Right of bang’ to price cyber risk; regulators focusing on ‘Left of Bang’ regulatory compliance; and many insured’s lacking the resources to develop cybersecurity risk management strategy, oversight, assurance and attestation.
This is before a conversation starts on the effects of cyber regulatory compliance on D&O insurance. There is only so much that can be drawn out of the insurance and reinsurance well, before it runs dry. Growing cyber insurance to $23 billion requires the insurance industry to consider alternative approaches to risk transfer.
Ted Dziekanowski Brian D. McCarthy
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberregulation #cyberinsurance
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