As one of the foremost issues facing enterprises today, cyber risk was a main topic discussed at this year’s Davos gathering. With rapid digital transformation taking place across sectors, data has become a prime target. In turn, building strong security around it has become a key pursuit. Vishaal Hariprasad writes for Dark Reading that this takes “integrating the technical, policy, behavioral, and economic elements necessary.” A part of that strategic mix gaining attention is cyber insurance.
The Role of Cyber Insurance
In November, Swiss Re published a paper on cyber insurance describing its rising role. While cyber insurance isn’t new, it is increasingly important. Considering the dangerous environment marked by sophisticated hackers and easier access that organizations exist in, cyber insurance premiums have expanded in the last few years. For instance, $10 billion worth of premiums were written globally in 2021. That number is expected to reach $23 billion by 2025.
The subject of cyber insurance has also been introduced in the U.S. Government Accountability Office (GAO). Noting that it can help offset costs and risk for essential sectors such as critical infrastructure, GAO issued a recommendation last year that the Director of the Federal Insurance Office work with the Director of the Cybersecurity and Infrastructure Security Agency to explore the benefits of a federal insurance program.
Cyber Insurance Challenges
Despite cyber insurance being a valuable asset in developing cybersecurity initiatives, “Most firms are uninsured or significantly under-insured for cyber risks,” Swiss Re states in its report.
As Dark Reading points out, this may be due to the difficulty in quantifying risk and underwriting cyber policies. There is also the concern that cyber problems are becoming “uninsurable,” which Mario Greco, chief executive at insurer Zurich, voiced at the end of 2022.
Given the trends outlined, though, cyber insurance is undoubtedly poised to remain a major interest in 2023. As entities explore their insurance options, it is likely that they will have to demonstrate how they are handling risk assessments and cybersecurity preparations. Learn more about the Dellfer features that can help you launch your cybersecurity process, better positioning your operations to block threats and stand out as an insurance candidate.
Sources:
- “View from Davos: The Changing Economics of Cybercrime” – Vishaal Hariprasad, Dark Reading
https://www.darkreading.com/edge-articles/view-from-davos-the-changing-economics-of-cybercrime - “Cyber insurance: strengthening resilience for the digital transformation” – Swiss Re Institute, November 2022
https://vpnoverview.com/wp-content/uploads/2022-11-08-sri-expertise-publication-cyber-insurance-strengthening-resilience.pdf - “Cyber Insurance: Action Needed to Assess Potential Federal Response to Catastrophic Attacks” – U.S. Government Accountability Office
https://www.gao.gov/products/gao-22-104256 - “Are Cyber Attacks at Risk of Becoming ‘Uninsurable’?” – Dan Lohrmann, Government Technology
https://www.govtech.com/blogs/lohrmann-on-cybersecurity/are-cyber-attacks-at-risk-of-becoming-uninsurable
