A joint report from Federation of European Risk Management Associations (FERMA) and its industry partners emphasises the need for collaboration among stakeholders in the risk and insurance industry to tackle evolving cyber risks and positions Europe as a potential global leader in developing solutions to address these risks.
A joint report titled “Cyber Insurance Dialogue – How Europe Can Lead the Way to Cyber Resilience” produced in partnership with leading industry players including Allianz Global Corporate & Specialty, AXA XL, HDI Global, Howden, Lloyd’s Insurance Company (Europe), Marsh, and Munich Re, is the outcome of a pan-European, multi-stakeholder dialogue.
A key focal point of the report is the call for increased collaboration between cyber stakeholders to strike a balance between insurers’ risk appetite and the coverage requirements of corporate buyers, ensuring the sustainability of the cyber insurance market.
It also highlights the importance of investment in identification and prevention measures, the adoption of transitional coverage and continuous underwriting practices, and proposes the establishment of an annual international summit dedicated to cyber resilience.
The report makes key recommendations in the areas of identification and prevention, underwriting, and coverage to enhance cyber resilience in Europe.
In terms of identification and prevention, the report suggests that large corporations should make investments in qualification, benchmarking, crisis management training, and protocols to improve their ability to identify and prevent cyber threats.
Additionally, the report advocates for the development of common cybersecurity standards for small and medium-sized enterprises (SMEs) across the European Union. It also emphasises the need for public authorities to launch awareness-raising campaigns, tools, and incentivisation schemes to encourage SMEs to invest in robust cyber security controls.
Regarding underwriting, the report highlights the importance of working towards a more standardised baseline questionnaire that can be used in underwriting discussions. It calls for enhanced training on technologies embedded in business processes and their associated security to ensure insurers have a comprehensive understanding of the risks involved.
The report also suggests the provision of transitional coverage options for SMEs that are in the early stages of enhancing their cybersecurity capabilities. For larger corporations, the report recommends implementing a more continuous underwriting approach that focuses on providing greater feedback throughout the underwriting process.
In terms of coverage, the report urges Europe to take a leading role by addressing risks that cannot be adequately covered solely by the private insurance market. It encourages further discussions on public-private cooperation to find solutions for emerging cyber risks, such as Cyber War and Systemic Risk.
The report also emphasises the importance of collaboration among all stakeholders, both public and private, in developing stress-scenarios to better understand and prepare for potential cyber threats.
The report also emphasises the importance of broader data sharing on cyber claims and proposes the establishment of an annual large-scale cyber event that brings together stakeholders from the insurance value chain and policymakers to address market challenges and develop effective cyber resilience strategies.
Philippe Cotelle, Vice President of FERMA and Chair of the Digital Committee, stated that the report represents a groundbreaking dialogue involving all key stakeholders in the cyber insurance industry.
Cotelle emphasised the collective aim of fostering cyber resilience within organisations and creating a robust, relevant, and affordable cyber insurance market to enhance the overall competitiveness of the European market.
Typhaine Beaupérin, CEO and Secretary General of FERMA, expressed belief in Europe’s potential to become a global leader in bolstering cyber resilience.
Beaupérin emphasised the need for a pan-stakeholder approach to address all aspects of the cyber challenge and establish risk-sharing initiatives capable of bridging the cyber protection gap.
Industry partners echoed the significance of collaboration and dialogue in navigating the complex cyber insurance landscape. They emphasised the importance of providing tangible capacity, coverage clarity, and strengthening cyber resilience for businesses, while recognising the evolving nature of cyber risks.
