In today’s digital economy, cyber attacks represent an ever-present and evolving threat for businesses across all sectors and of all sizes. Cyber risks are as much about human and systems errors as they are about malicious threats.
Effective cyber risk management is an essential business practice. It is complementary to overall cyber security and vice-versa, akin to sprin-klers for property insurance. Cyber insurance in turn is an important tool in managing the transfer of some of this risk. A workable, relevant and affordable cyber insurance market is therefore vital to ensure that the system is robust and resilient and that European businesses can respond swiftly to these changing exposures.
It is our belief that, despite their greater enterprise risk management maturity, large corporates must continue to find ways to improve iden-tification and prevention, for example by continuing to invest time and resources in the quantification of risk. The private insurance market can help in this area. For instance, as exposure grows, once risk identifica-tion has been carried out, the insurance market including brokers, may be able to help guide larger corporates in identifying priorities for pre-vention that would improve their access to the best available insurance products.
This would also provide enterprises with a basis for benchmarking. When risk teams can quantify and benchmark risks this helps to gain buy-in at the C-Suite for greater investment in risk management.
Investment in risk prevention not only builds the resilience of compa-nies to attack, it also makes the risk more insurable for underwriters. Preparing for and preventing cyber losses is inextricably linked to the
insurability of a cyber loss. It is in the interests of the insurance market to ensure that corporates have invested in proactive risk management and cybersecurity measures to reduce the likelihood and impact of a loss and consider measures such as ongoing processes and improvement, which might eventually be reflected in premiums paid by the insured.
