The implementation of various strategies to address such concerns has sometimes led to unintended consequences and consternation, which can be further complicated by:
- The market’s continued growing pains.
- The always-on, ubiquitous nature of cyber risk.
- Continued concerns over ransomware, supply chain exposure, security and privacy regulations, and catastrophic and accumulation risk, including nation state activity.
When insureds do not feel like they are provided with clarity, transparency, and coverage certainty, their confidence in and comfort working with the cyber insurance market declines. This occurs even as the product continues to prove to be effective in protecting balance sheets, paying claims, and enabling organizations to responsibly understand, measure, and manage cyber risk.
Close attention should be paid to the details and possible effects of implementing strategies before they are broadly introduced. The effects of any strategy — like most elements of the cyber insurance market — are greatly nuanced by the risk profiles and needs of individual insureds.
Maintaining a constant feedback loop between brokers, insurers, insureds, and other stakeholders will help to mitigate some of these challenges. It will also provide parties with full transparency into the intent, purpose, potential challenges, and applicability of underwriting and pricing strategies moving forward, and will build trust throughout the cyber insurance market.
Looking ahead
We understand the challenges that all stakeholders face , not just in the cyber insurance market, but also in the overall cyber environment. Hopefully this update provides more perspective on what's happening, why, and some optimism about the path forward.
The offering of available, affordable, sustainable, and high-quality cyber coverage is imperative to building a more stable, effective, and sustainable cyber insurance market. Insurers need to balance the need for profit while providing offerings that meet companies’ needs. Clients need an effective product at a reasonable cost.
Marsh is committed to championing collaboration, transparency, knowledge sharing, and communication in the cyber resilience ecosystem to help our clients protect and promote their possibility. Learn more about our strategic, enterprise-wide approach to cyber resilience.