The Global Federation of Insurance Associations (GFIA) has published a paper that details a number of challenges the cybersecurity and cyber insurance industries currently face, and which proposes some solutions moving forward.
GFIA notes that cyber risk is a rapidly evolving global issue. It suggests that growing connectivity and supply chain interdependencies are becoming increasingly prevalent and necessitating ever more resilient and widespread cybersecurity.
The federation outlines several responses to these mounting pressures that are of pertinence to the re/insurance industry.
Chiefly, it proposes that consistent international rules on cybersecurity and privacy need to be established to avoid inconsistent regulations for international businesses, like insurers.
GFIA also advocates greater sharing of threat and incident data between businesses and insurers, as it suggests this would allow companies to make better risk-assessments and allow insurers to better understand and underwrite cyber risks.
This is particularly important given the difficulties involved in quantifying cyber risks, which GFIA notes are constantly evolving and subject to many uncertainties concerning the identity of bad actors and malicious versus accidental intent.
The paper also proposes that the value of cyber insurance is preventative as well as compensatory, and that better integration and consideration of insurers’ pre-event risk assessments and employee training resources would enhance business’ risk calculations and general cyber-resilience.
However, GFIA again notes that accurate assessments and risk-models rely on large pools of shared-data, and recommends that insurers and clients develop more trusting business relationships so that potentially sensitive information can be factored into evaluations.
The federation also points to inadequate cyber risk awareness and expertise as barriers still to be tackled despite the continued growth of cyber insurance offerings.
