"In insurance, the cyber market is expanding quickly as more businesses respond to the risk and buy cyber insurance. The Hiscox Cyber Readiness Report 2019 shows that the uptake of dedicated cyber insurance is on the rise with 41% of [respondents] saying their firm has cyber insurance – up from 33% a year ago – and a further 30% saying they are planning to buy cyber insurance in the next 12 months.
In addition, higher limits and the widening of terms and conditions in areas like contingent business interruption and supply chain failure means the overall amount of systemic cyber risk shouldered by the insurance market is growing at a rapid rate."
Devin Page Hiscox
The imperative however is that the market responds quickly. If a major cyber event occurs in the near future, before silent cyber has been dealt with appropriately, and with reinsurance structures being structured without the appropriate appreciation of cyber cat risk, the severity or quantum of size of the loss potential will catch people off guard.
This is a collective issue that will require the entire market to address. This begins with a deeper understanding of the evolving cyber risk present in the world, addressing the shortcomings of wording currently used in the market, structuring reinsurance programs that will ensure resilience against catastrophic events, and creating products that foster a sustainable and scalable market in the long run.
Read the full report and anticipate anticipate the storm.
Risks like windstorms, earthquakes, floods, wildfires and terrorist attacks are usually the first to come to mind when one thinks of catastrophes. But, given the increasing levels of global digital connectivity, greater penetration of cyber insurance, inadequate contract wordings, and the silent cyber threat, the risk of a devastating cyber catastrophe is now capable of inflicting similar levels of losses. Despite the growing risk it is clear that the reinsurance market has work to do if it is to deliver a more suitable, sustainable, and scalable response to meet the challenge of a cyber catastrophe.