Insurance can contribute to cyber risk management

Insurance can contribute to cyber risk management | Insurance Business New Zealand

Insurance can contribute to cyber risk management
The insurance market, including reinsurance companies, brokers and relevant associations have an important role to play in providing greater clarity about the coverage available for cyber risk and which policies provide that coverage, according to the Organisation for Economic Co-operation and Development (OECD).

The OECD, in its recently published Enhancing the Role of Insurance in Cyber Risk Management report, provided a series of policy recommendations aimed at enhancing the contribution of the cyber insurance market to managing increasingly prevalent cyber risk.

Other key findings of the report include:
  • Insurance can contribute to improving the management of cyber risk and should be considered an essential component of countries' strategies for addressing digital security risks.
  • The policy, legal and regulatory framework can have important implications for how much information on cyber incidents is made available and therefore the level of uncertainty when underwriting cyber risk.
  • The lack of data on cyber incidents is a significant impediment to the management of cyber risk, including the transfer of cyber exposures to insurance markets.
  • There is significant concern about the potential for accumulated losses as a result of an incident with sizeable impacts on a large number of policyholders.
The report was based on the input from reinsurance companies, brokers and regulators.

The OECD said it will hold an event on unleashing the potential of the cyber insurance market, which will take place at the OECD Conference Centre in Paris, France, on Feb. 22-13.

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