With insurers struggling amid rising cyber claims, Swiss Re is promoting public-private partnership insurance schemes, making government-backed funds one option to fill coverage gaps. I am using it as
According to Swiss Re estimates, global cyber insurance premiums will reach $10 billion in 2021.and study The insurance giant, announced this week, expects annual growth of 20% to 2025, with premiums rising to $23 billion over the next few years.
Forrester estimates the average cost of a typical data breach, $2.4 million in investigations and collections, only 55% of businesses currently have cyber insurance. Additionally, less than 20% have a range limit above $600,000, which the analyst firm cites as the median ransomware demand for 2021.
“The market needs to mature further to ensure that adequate insurance protection is available,” said John Colletti, head of cyber reinsurance at Swiss Re. register“Our industry is playing a key role by addressing three issues: better data and modeling, greater consistency and clarity in contracts, and the identification of new sources of funding.”
The Swiss Re Institute recommends all three of these points to reduce exposure to cyber risks and keep the insurance industry profitable.
While the industry typically quantifies risk based on historical data, this is not the case for cyber risk for two reasons: the lack of standardized data and the rapidly changing threat landscape.
According to the report, “implementing cybersecurity standards will improve data in terms of breadth and transparency, enable meaningful risk insights, and enable more accurate pricing and modeling.”
Swiss Re also encourages insurers to update policy language regarding exclusions, terms and conditions to clarify coverage.
Other insurers and marketplaces also struggle with policy language. Lloyd’s of London recently announced changes to their seller policy. stop covering losses too soon From cyberattacks of specific nation states and those that occur during warfare, declared or not.
Following the 2017 NotPetya cyberattack, two major insurers, ACE American Insurance Company and Zurich American Insurance Company, were also embroiled in legal trouble due to unclear coverage.In this case the problem was around what constitutes an act of war — Cyberspace may also void insurance claims — and whether insurers should pay for damages caused by state-sponsored or organized network intrusions.
A study by Swiss Re notes that “exposure to systemic risk scenarios that are difficult to insure remains a barrier to industry capacity”. “Stakeholders have taken steps to correct some of these issues, but factors such as the attribution of cyber events remain major issues.”
Swiss Re also sought “new sources of funding”, adding that “public-private cooperation is key to mitigating cyber threats to critical infrastructure”.
One way to do this, according to the report, is through government-backed funds to address the cyber insurance gap.In line with these policies, the U.S. Treasury recently It was published Request for comments on questions about cyber insurance and catastrophic cyber incidents.
Swiss Re said another option was to “enter the market for insurance-related securities”. ®