In a market where trends shift quickly, one ongoing theme in the cyber insurance world may be that of convergence. While we in our Advisen Cyber Guide differentiate between insurers, brokers, vendors, and more, the fact is, no organization can manage cyber risk without the right blend of all parties. From the industry standpoint, no one organization can meet every need without assistance from outside experts.
The types of partnerships necessary to meet ever-expanding cyber threats have blossomed over the last year, with insurers tapping into security expertise, brokers launching services to help customers estimate their risk, and new insurance ventures with an eye toward technology cropping up. The line between insurance and technology has blurred and will continue to do so.
Conversations with top cyber professionals bear out the belief that a blend of insurance and technology offers the best bet for tackling cyber risk effectively. Be it data breach response, measuring cyber risk aggregation or avoiding costly business interruption losses, the know-how of the insurance industry paired with the speed and flexibility of tech providers is a bet everyone is willing to take.
Insurance is a field perhaps legendary for its commitment to history. The tried-and-true reliance upon loss history and the demonstrated strength of decades of being in business, for example, have always been a boon for the industry. Legacy systems built to last beyond their usefulness and lack of nimbleness in responding to rapidly changing risks, however, are perhaps less helpful.
Observers note that cyber requires insurers to flex outside of their comfort zones in measuring a risk that knows no geographic boundaries and is limited only by the dark imaginations of cybercriminals. It stands to reason, then, that new blood must come into the market in the form of companies that have charted their courses by the tides of digital wrongdoers and tailored their responses to offer up the best defenses.
Not only defenses—cyber risk demands, perhaps more than any other line of insurance, a strong proactive stance and attention to minimizing the chance that known threats will befall your organization. Insurers, brokers, and their vendors fully acknowledge the key role they play in drawing attention to the risk and outlining the steps that any business can take to make themselves less of a target.
Without the prompting of savvy brokers, many organizations may not even realize the options available to them to better manage cyber risk. Without the expanding cyber insurance market, the greater number of organizations looking for some type of risk transfer solution wouldn’t find the right fit. By drawing on the wide number of security firms specifically aimed at cyber insurance, all parties can break down barriers between risk management, IT, and the C-suite.
There’s no single style of company, or one exact blend of insurance and technology that could be considered the “right” solution. Every insurer, broker, vendor, and insured approaches cyber risk in a different manner.
While the best fit for one might be a tech start-up that offers insurance, another organization might feel more comfortable working with their longtime insurer and broker and their recommended vendors. Others may want to take a self-insurance route. Still others rely on their legal advisors and personally selected security experts. The cyber market will excel by finding the appropriate pace and options for themselves and, in turn, their clients.
This blog from Editor Erin Ayers was originally published in Advisen’s 2018 Cyber Guide: The Ultimate Guide to Cyber Service Providers. Follow the link to download the guide—the most comprehensive, independent listing of more than 160 companies providing pre- and post-cyber incident service organized neatly in 10 categories.