This quarter’s insights delve into various aspects of the dynamic cyber insurance sector, shedding light on significant trends and considerations.
Premium Prices Shift Amid Evolving Dynamics
Cyber insurance premiums in the U.S. decreased 4% YoY in Q2 2023 due to broader coverage, stronger cybersecurity controls, and enhanced sub-limits. This comes after previous increases of up to 130%.
SEC Cyber Rules and Insurance Risks for Directors
New cybersecurity regulations from the U.S. SEC could pose risks for board directors and insurers. The disclosure rule could lead to shareholder lawsuits after a security breach, potentially affecting D&O insurance coverage. There may also be exclusions in both D&O and cyber insurance policies.
AI Revolutionizing Risk Assessment
AI is used to analyze policyholders’ systems for risk profiles in insurance underwriting. Resilience Cyber Insurance Solutions uses AI-driven methods, and it’s being discussed by the National Association of Insurance Commissioners.
AI’s Role in Reducing Underwriting Bias
AI supports underwriters by offering insights that the human brain cannot replicate, supplementing traditional approaches and reducing bias.
Legal Complexities: Statute of Limitations
A lawsuit against Lloyd’s of London by the University of California shows the complicated legal issues that arise in cyber insurance claims. The case involves a 2014 cyber attack and questions about compliance. Insurers claim the university didn’t meet cybersecurity requirements. This case reveals how intricate cyber insurance claims can be.
Unraveling the Ransomware Conundrum
Ransomware attacks are up in 2023, and there’s debate around the connection between cyber insurance and attack frequency. Some say insured companies have more ransomware incidents, but others argue that cyber insurance doesn’t increase the likelihood of payment. It’s believed that low costs for cyber criminals and lack of punishment are bigger factors driving the rise in attacks.
As the cyber insurance landscape evolves, navigating these multifaceted dynamics becomes crucial for insurers, businesses, and individuals.