The Federation of European Risk Management Associations (FERMA) said it has concerns that the cyber insurance market is “evolving in isolation from the industries which it insurers,” and is calling for more certainty regarding the long-term viability of the product.
Currently, the appeal of cyber insurance to corporate buyers may decline, FERMA said, due to more policy exclusions and restrictive terms and conditions.
Related: Lloyd’s Cyber War Exclusions: Confusing, Disruptive, but Necessary?
“The corporate market recognises the criticality of cyber insurance as well as the need for the insurance sector to manage its potential exposure to cyber risk, particularly given the systemic risk it poses,” said Phlippe Cotelle, FERMA vice president, in a statement. “However, it is also important to ensure that the product remains attractive and efficient for buyers. Recent decisions to restrict the scope of coverage have created uncertainty regarding the ability of insurance to meet the evolving cyber risk requirements of policyholders.”
FERMA suggested more “concerted dialogue” through a COP(Conference of the Parties)-style annual event for all stakeholders – insurers and reinsurers, brokers, buyers, regulators, and service providers – for the betterment of a sustainable cyber insurance market.
“Improved dialogue will not only help ensure a product which is for for purpose but also help build stronger relationships between cyber insurance buyers and the market itself,” added Typhaine Beauperin, CEO and secretary general of FERMA.
Topics Cyber
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