The Increasing Risk in Cyber Insurance

Recently, the CEO of a major global insurer said:

“What will become uninsurable is going to be cyber”

What can that possibly mean?

What are the short-term implications?

Obviously this prediction is for some point in the distant future. But this brings into sharp focus how unsettled this category continues to be. Insurers understand that technology advances, and product innovation may be outpacing their policies and protections.

In the past 2 years, we’ve seen increased scrutiny on compliance, contracts and claims reimbursement from cyber insurers. This is real.

Yet amidst all this uncertainty, Cyber Risk and insurance contracts still have to get done. Here’s our view on implications for anyone involved in the process:

1. Approach the process with a very critical eye. Know that insurers of all types are struggling to keep up

2. Assess your risk. It’s critical to have a clear view of the scale of your specific risk factors, relative to company revenues, employees, etc.

3. Know the differences in risk types and your vulnerability levels: : network, operating system, human vulnerabilities, process vulnerabilities

4. Compliance is absolutely critical: many leaders are unaware of or finding it very difficult to maintain compliance with everything they’re contractually obligated to deliver