For immediate release
Contact: Scott Holeman, 785-760-3777
NEW YORK, Dec. 7, 2021 – Cybersecurity is no longer an emerging risk but an imminent one for organizations of all sizes, according to a Joint Industry Forum (JIF) panel session moderated last week by Dale Porfilio, Chief Insurance Officer, Insurance Information Institute (Triple-I).
“We’ve seen a large increase in ransomware attacks because they are lucrative,” said Chris Beck, Managing Director, Milliman. “Their (cybercriminals’) moves are becoming more sophisticated, which means the challenge is becoming larger for insurance companies and institutions that are subjects of the attacks.”
Milliman, an independent risk management, benefits, and technology firm with offices worldwide, believes any organization that deals with sensitive data faces increasing challenges in keeping that data safe.
Cyber insurance purchase rates reflect the growing awareness of this risk, with one global insurance broker finding the percentage of its clients who purchased this coverage rose from 26 percent in 2016 to 47 percent in 2020, the U.S. Government Accountability Office (GAO) found in a May 2021 report.
By 2026, projections indicate insurers will be writing $28 billion annually in gross written premium for cyber insurance, according to Paul Miskovich, Global Business Leader, Pango Group.
Miskovich told JIF attendees cyber insurance has been profitable almost every year for most insurers. While there has been some fluctuation in cycles, most cyber risk has been managed through more controls in underwriting, changes in cybersecurity tools, and modifications in information technology maintenance for employees, he said. The industry’s evolution will likely rely on recruiting new talent, Miscovich added.
“I think the first step is bringing more young people into the industry who are more facile with technology,” said Miskovich. “Where insurance companies can’t move fast enough, we need partnerships with managing general agents (MGAs), with technology and data analytics, who are going to bring in data and new information.”
“Reinsurers are in the game,” said Catherine Mulligan, Global Head of Cyber, Aon, who stressed reinsurers have been doing a lot of work to advance their understanding of cyber issues. “The attack vectors have largely remained unchanged over the last few years, and that’s good news because underwriters can pay more attention to those particular exposures and can close that gap in cybersecurity.”
Mulligan says reinsurers are committed to the cyber insurance space and believe it is insurable. “Let’s just keep refining our understanding of the risk,” she said.