Last week I blogged on the challenges facing IT pros whose companies are investing in cyber insurance, you can read it here.
Today, insurance technology company Timetric has published its own research into this evolving area of the insurance business. This report highlights the significant growth in this market as the size of global gross written premiums grew from US$850 million in 2012 to an estimated US$2.5 billion in 2014.
“The cyber risk insurance market is gaining traction due to a growing number of cyber-attacks and the increasing reliance of businesses upon technology for operational capabilities and storing data. However, insurance firms are responding slowly to this rising demand, and there is still number of imperfections in the market that is leading to a sub-optimal outcome.”
Our own report highlighted how insurers need to collaborate with cyber security experts to provide robust cyber risk management to the businesses. The ideal investment in cyber insurance requires a balance between IT security measures and a premium that offsets risk. An insurer’s expertise lies in valuing and underwriting risk, while cyber security experts specialize in using technology to deal with cyber vulnerabilities. Risks faced by firms tend to be unique to the industry in which they operate, and this requires any policy to be accordingly customized. The degree of cyber exposure, the scale of the organization and the type of data collected are all fundamental to ensuring the correct cover.
How can we begin to address this disparity between insurance and technology? French insurer Axa is now recruiting computer experts and engineers to build a centralized cyber team as a strategy to differentiate itself in the cyber insurance market. For cyber insurance to be able to offer a real alternative in reduction of risk to the data and infrastructure of businesses insurers must work to understand the impact of the technology and IT pros the effect that insurance has on their networks.