The Cyber Risk & Insurance Innovation Conference was held in London and organised by The Intelligent Insurer. It brought together industry leaders and experts, bringing light on the landscape of cyber security and insurance. I had the privilege of being there representing Cyberion. Here are some of my key insights on the cyber risk and insurance innovation landscape.
1. Ransomware’s Unyielding Surge: An Opportunity and a Challenge
Ransomware remains a great threat, with claims increasing by 5-10 times in recent years. This surge, particularly impacting SMEs, presents both a significant challenge and an opportunity for the industry. Although, the controversy surrounding coverage persists, all agree it is key for clients. Insurance companies need to make their risk assessment simpler. They should encourage clients to implement professional risk measures and incident response plans. The underinsurance of SMEs shows that there is a need to tailor solutions that bridge the gap. Clients should be rewarded for adopting robust security measures.
2. Cyber Security’s Central Role in Business, Echoed by Aston Martin’s CISO, Robin Smith
The opening message from the conference was the central role of cyber security in all businesses. Robin Smith made clear that cyber threats are not limited to specific industries; they are present in every sector. It is therefore important to weave cyber security into the fabric of insurance strategies. As leaders, we need to champion this message. Cyber insurance is a component of every business risk management toolkit. Of course, great pictures from Aston Martin cars made the keynote a highlight!
3. Data Availability vs. Model Limitations: Uncharted Territory for Exposure Assessment
Despite the wealth of data available, models for exposure assessment are still a work in progress. The industry acknowledges the need for improvements, and many existing models remain untested. Many called for joint efforts to align terms of coverage, refine these models, and make sure that they accurately reflect the cyber risk landscape. All saw great potential in the recently issued cat bonds which demonstrate significant progress.
4. Navigating the Cyber Insurance Seas: From Hardening to Softening
Recently, we have seen a shift in the market – it was getting tougher, but now it seems to be getting a bit easier. The prices were going up and guidelines stricter because cyber risks and claims were going up. But now, there are signs that it is getting a bit easier, and this is a great time for businesses to get cyber insurance. Some of the expansion in premium was driven by the price increase in recent years.
5. Rising Tide of Regulation: Navigating the Changing Legal Landscape.
The regulatory landscape for cyber security is changing, with increasing requirements from public authorities. NIS2 Directive and DORA (Digital Operational Resilience Act) are ushering in a new era where cyber security basics are required more broadly than ever before. Insurers must stay attuned to these changes and align with regulatory expectations.
6. Continuous Adaptation
The cybersecurity landscape is constantly evolving, and so should our approaches to cyber insurance. Insurers need to stay agile and adapt their policies to keep pace with emerging cyber threats. This adaptability ensures that coverage remains relevant and effective in the face of rapidly changing risks.
7. Cyber security Education is Paramount
There is a significant need for increased cyber security awareness and education. In particular , it is key to develop talent in order to be able to support the planned growth. It is our responsibility to contribute to the broader understanding of cyber threats and risk management strategies.
These insights on cyber risk and insurance innovation serve as guideposts, steering us toward more robust and responsive strategies. Let’s continue to adapt, collaborate, and innovate to stay ahead of the dynamic cyber risk landscape.
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