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February 23, 2023
The underlying theme of Cyber risk remains volatility – for both insured and insurer. While Cyber insurance has been available for over twenty years, it has only come into mainstream focus in the past five years due to the prevalence of ransomware attacks. Prior to that, Cyber insurance was seen as mainly an instrument to manage data breaches and privacy. Ransomware has demonstrated that Cyber risk is not limited to theft of data and is truly an enterprise risk.
Areas of concern now extend to operational disruption; business interruption, data re-creation and supply chain. Symptomatic of that perspective, according to Allianz’s 2023 Risk Barometer, Cyber risk ranked as the top issue facing businesses around the world in 2023 for the second year in a row. A key driver of that concern is that Cyber risk is that it is also a remarkably fluid category that presents an unknown quantity. Cyber insurance has been instrumental in assisting impacted organizations and provided a critical financial backstop for many companies in the face of catastrophic ransomware attacks. The industry has been at the forefront of diagnosing the underlying issues and prescribing necessary controls on how to mitigate future attacks.
As we look forward, there are no shortage of emerging Cyber risks that will impact organizational balance sheets and Cyber insurance will need to continue to help manage that volatility. We will delve further into these trends and how the Cyber insurance marketplace is responding in our latest opens in a new windowMarkets in Focus :: Cyber report.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.