The president of the European Central Bank (ECB), Christine Lagarde, warned earlier this year that a coordinated cyberattack on a major financial institution could cause a “liquidity crisis”. With that in mind, it’s no surprise that financial institutions have been the earliest and most willing adopters of cyber insurance. They tend to be sophisticated buyers of insurance, and are subject to stringent industry regulations and standards, which carry harsh penalties and consequences if they’re not met.
Another early adopter of cyber insurance was the technology industry, particularly large companies that process and host a lot of data for third parties. Again, this is partly due to the data privacy regulations that have been introduced or are in development around the world. One example is the European General Data Protection Regulation (GDPR) Act, which introduced some new multi-jurisdictional obligations and requirements for data processes, causing many technology companies to completely re-write their data privacy programs – cyber insurance being a key element of that program - or race to create programs if they didn’t have one to start off with.
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