Ransomware drives ‘interesting outcomes’ for cyber co-insurance products
The rise in cyber attacks, and specifically ransomware incidents, has brought about “some very interesting changes” for the class of cyber insurance, Daniel Carr (pictured), head of Cyber at Ariel Re, told Intelligent Insurer.
“I wouldn’t in any case suggest ransomware has been good for the industry because it’s caused an awful lot of economic harm. But it has demonstrate that cyber insurance works, is effective, and has a real value proposition,” he said.
There has been an acknowledgement in the maturing risk management community that companies can’t always access the cybersecurity risk management expertise they need, he said.
“There’s been an increased acknowledgement that everyone has exposure to these threats. If you were to go back three, four or five years ago that position was largely confined to a more specific group of organisations—those with high profile clients such as the banking sector or government—and those managing large volumes of personal data, driving an acknowledgement that they held a regulatory exposure.”
Carr said that the increase in incidents, especially ransomware attacks, has highlighted that attacks can be indiscriminate of industry or a company’s business practices. As a result, this has significantly increased the awareness of cyber threats to a broader market, especially those that did buy cover. “It’s provided an opportunity for the insurance sector to prove the product is valuable and worthwhile.”
According to Carr, the next phase of development for this complex class follows a few years of deterioration of underwriting results, as the industry tried to get a grip on ransomware. But, he said, if you analyse the nature of those losses and where they came from you couldn’t necessarily characterise that as one particularly large event.
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