Page 30 - The IT Guidebook

CYBERSECURITY INSURANCE - CONTINUED CYBERSECURITY INSURANCE - CONTINUED

Illinois Biometric Information Privacy insurance products and the requirements
CYBER INSURANCE UNDERWRITERS: GOVERNMENT: Act, Europe’s General Data Protection to qualify for them. Cyber insurance
Regulations, and many other rules. These companies also need to balance renewal
It has become clear that rate increases Many are watching an increased effort regulations follow a common theme that timelines with required data security
alone will not be able to solve the current by both the U.S. and international holds organizations to specific standards control remediation efforts amidst potential
and future cyber market challenges. There governments to work with and provide as they collect, store, process, and budget limitations. Making sure your
is a focus on changing coverage terms, insight to the private sector in managing transfer consumer data. In some cases, technology environment is up to speed with
which are trending to restrict coverage for cyber threats, with a particular focus on the noncompliance can lead to regulatory respect to reducing cybersecurity threats
systemic risk, where a single vulnerability ransomware epidemic. Guidance around investigations, lawsuits, fines, and is paramount. In order to have effective
may impact a majority of a carrier book of OFAC compliance, specific to whether settlements and may provide a path for cybersecurity insurance that permits your
business. Carriers are beginning to address or not ransom payments can legally plaintiffs to pursue private rights of action. company to transfer the risk of a breach,
this in their policy forms by imposing be made, was provided in 2021, with companies must implement stronger
sublimits and/or exclusionary language for aggressive action in sanctioning at least Because of the highly nuanced nature of cybersecurity internal controls.
these global cyber incidents, and it may one cryptocurrency exchange. The private the cyber insurance market, it is imperative
impair the buyer’s ability to transfer cyber sector may be subject to severe penalties that your organization is working with an
risk in the comprehensive way it did in for noncompliance to government- insurance broker who specializes in your
prior years. mandated OFAC requirements. Also, law particular industry or line of coverage.
enforcement is to become more proficient To effectively manage the underwriting
REINSURERS: at helping victim organizations recover process, it is essential that your cyber
ransom payments to threat actors, using insurance company maintains a detailed
Expect markets to seek support from outside a combination of cryptocurrency experts, working knowledge of the latest cyber
the traditional rated capacity market via computer scientists, blockchain analysts,
collateralized reinsurance and Insurance- and crypto-tracers in this effort. Finally,
Linked Securities (ILS) transactions with we expect law enforcement to embark
the capital markets. This could also take on a more aggressive offensive strategy
the form of looking to different reinsurance in disrupting ransomware as a Service
structures and product development. Also (RaaS) affiliates.
expect continued cyber loss modeling tool
development as the market pushes for The cybersecurity insurance industry has
further insights into the far-reaching threats changed dramatically in the past 3 years
of systemic cyber risk. and will continue as hackers become more
sophisticated. Regulatory risk continues
CYBER RISK MANAGEMENT to evolve as privacy laws around the U.S.
VENDORS: and international arenas expand. Data
subjects, and the regulators that represent
The service providers that help prevent them, are more empowered than ever by
and mitigate the effects of cyber incidents the California Consumer Privacy Act, the
play a role of growing importance and
have become a fixture in today’s cyber
marketplace. Buyers of cyber insurance will
need to leverage these services one way or
another, and the vendors that can provide
efficient and cost-effective solutions for the
needs of specific risk profiles will continue
to emerge as a necessity.

29 30