Insurers and underwriters in the cyber market could see their capacity challenged as more claims become apparent, a cyber expert has said.
With mandatory breach notification laws confirmed last month, and set to roll out in Australia in February 2018, focusing on claims will become vital in the cyber market.
Meena Wahi, a specialist cyber broker and director of Cyber Data-Risk Managers, said that insurers and underwriters that try and win too many clients could come in for a shock.
“At the moment, I think some insurers are keen to win business and are taking on risk but I’m not sure if they have the capacity to respond to multiple claims that could happen,” Wahi told Insurance Business.
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“Claims can be multiple, a whole lot of businesses can be affected and if one insurer has picked up small to medium businesses and their websites have all been hacked or their hosting site has been hacked, then the capacity of the underwriter may be challenged.”
While companies may have been able to keep a data breach confidential in the past, new notification laws will see claims become more apparent across the entire market.
Wahi noted that once these claims become visible, pricing and policy wording will become easier to define. Indeed the advent of mandatory breach notification laws will also see more insurers and underwriters enter the Australia market, Wahi believes.
“I think there will be more interest from London,” Wahi said.
For insurers that already have a defined presence in the Australian cyber market, the patience that they have shown while the market has developed will be rewarded as the market grows thanks to the new legislation.
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