Peace of mind amid the radical uncertainty of cyber

The industry has been grappling with cyber risk for several years, and its approach to writing the business has resulted in a few ups and downs, due in part to the rapidly evolving nature of the risk, systemic threats associated with cyber events, and geopolitical entanglements.

As a result of this, pressure is mounting on brokers and underwriters to deliver more certainty to clients. But where do the roots of this certainty lie in a space where there are so many unknown unknowns?

Is there a clear line in cyberspace distinguishing between criminals and nation-states? How do insurers handle systemic cyber risks? How can one model cyber risks of types which are yet to occur?

In the latest installment of our Risk Spotlight docuseries, featuring Liberty Mutual's global product leader for cyber, Matthew Hogg, and Justyna Pikinska, global head of cyber analytics at Gallagher Re, we aim to explore how insurers and clients can better interact to paint a clearer picture of the cyber risk landscape.

Hogg pinned his hopes on a clearer picture of the cyber risk landscape being captured through the vector of modeling. As models begin to delve into previously unexplored realistic disaster scenarios, insurers will be able to more effectively relay to clients the dangers in the sector.

Pikinska identified communication between insurers and clients as another area in dire need of improvement. She believed that educating clients about cyber hygiene could lead to increased competence and a better understanding of existing threats in the sector.

Hogg added to this by saying the market can take more of a proactive stance in ensuring that clients fully understand what is covered in their policies.

Regardless of the context, it's evident that greater clarity in this space is not just a solution to its many issues, but a necessity for its continued existence. As businesses heavily rely on operations with vast cyber liabilities, finding clarity and understanding of cyber risks is essential for their core functioning.

Watch this 12-minute Risk Spotlight episode to learn more about:

  • How the threat landscape has evolved and how this has shaped the way insurers and clients talk about cyber
  • The challenge with war wordings
  • How exposure modelling in the space has improved and helped attract more capital
  • The consistent need for rate adequacy to protect future sustainability of the class
  • Key areas to address, including education and the talent shortage