Europe must push envelope on cyber with corporates & gov’t at table
Europe can only build cyber resilience by bringing in the full stakeholder chain of corporate client – insurer – government to cut the coverage gap where possible and plug any lingering holes of uninsurability, the Federation of European Risk Management Associations (FERMA) is arguing.
Insurers alone are often too little and too late and a multi-stakeholder collaboration is required from the earliest stages, authors said in a report co-produced by Allianz unit AGCS, AXA XL, HDI Global, Howden, Lloyd’s, Marsh and Munich Re.
The cyber market’s current shortcomings hinge around the “balance between the risk appetite of insurers and the coverage requirements of corporate buyers to ensure a sustainable market,” authors said.
The lack of a gold standard for cyber resilience across corporate segments puts the industry on the back foot from the go and authors seek greater investment in identification and prevention measures, transitional coverage and continuous underwriting practices, and on-going high-level consultations moving forward.
Within identification and prevention, the group would set standards for large-cap identification and crisis management through quantification, benchmarks, training, then extend some lessons as standards for SME segments.
Underwriting can be standardised and streamlined, better embedded with security and training and, in turn, made more continuous for clients. SMEs should be able to step up via a system of transitional coverages.
FERMA is an evident believer in government intervention, calling on Europe to “become a global leader by addressing possible solutions for risks that cannot be covered by the private insurance market alone.” Select risks require public-private partnership formats. Data sharing standards might be set centrally.
FERMA CEO and Secretary General Typhaine Beaupérin commented: “We believe that Europe can become a world leader in efforts to bolster cyber resilience. Adopting a Europe-wide, pan-stakeholder approach to address every aspect of the cyber challenge and ensuring that through ground-breaking risk-sharing initiatives we can create the depth and breadth of capacity required to bridge the cyber protection gap.”
AGCS global head of cyber Scott Sayce said: “Cyber is the top business risk in the Allianz Risk Barometer with ransomware, business email compromise and supply chain attacks on the rise, accelerated by AI and technology. Responding to the ever-evolving nature of cyber risk, the cyber insurance market has matured quickly in producing solutions and innovative approaches. Allianz is committed to being a reliable cyber insurer for the long-term providing tangible capacity, coverage clarity and helping our clients to strengthen their cyber resilience.”
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