"The cyber insurance market continues to grow and innovate to meet buyers' evolving needs. First-party risk, particularly business disruption, has become an important cyber consideration, and the cyber insurance market is responding with affirmative coverage for both direct and contingent business interruption losses arising out of cyber events. The market, which has notional capacity approaching 2 billion USD and the demonstrated ability to evolve coverage in alignment with changing technology risks, is well positioned to meet coverage needs of companies across a full spectrum of industries. In addition, the cyber incident data gap is closing steadily, helping drive improved underwriting and pricing. We stand ready to work with industry, policy makers and our clients to unleash the full potential of this market", she explained.
According to Nilay OZDEN, cyber insurance can mitigate the financial impact of cyber-attacks; it can help companies and society return to economic or financial normalcy as quickly as possible after an attack. The efficacy of cyber insurance in protecting the firm from catastrophic events is unarguable - there is no competing set of cybersecurity investments that remove so much financial risk from the firm so efficiently.
The simple act of applying for cyber insurance also incentivizes institutions to assess the strength of their cyber defenses. Once a cyber policy is purchased, further incentives are created because insurers are then motivated to help policyholders strengthen their cyber defense.
Many insurers offer monitoring and rapid response services to policyholders, including expert legal advice and forensic services to determine what happened and whether the cyber-attack should be reported to authorities. As such, cyber insurance may also help companies comply with reporting a cyber-attack or data loss as mandated by the GDPR and the NIS Directive.
It is also important to increase the clients' awareness regarding the importance of this financial product. "Clients still need to be educated about the added value of cyber insurance and we support initiatives, including from regulators and supervisors, to raise awareness", Nilay OZDEN explained.
"The many benefits of cyber insurance are apparent to the private sector and they are buying the product, which is ready now and works well. In the US, close to 40% of our clients have cyber insurance now, with an annual growth rate last year of 12%. The number of Marsh EU-based clients purchasing standalone cyber insurance is over 700, with a growth rate of no less than 50% last year. In Continental Europe, 93% of respondents to our recent cyber security survey (with Microsoft) are confident that the coverages within their organization's insurance will respond to costs incurred in the event of a cyber event", she explained.
"In Europe, we placed more than 1,000 standalone cyber policies, a segment which has been growing at a rate of more than 50% year on year. Moreover, in Europe there are more than 35 carriers from around the world that potentially can provide more than 750 million EUR in capacity to cover cyber risks", Nilay OZDEN pointed out.