Cyber ransoms test insurance market
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Securitization could be in cyber insurance’s future, but for now policyholders and insurers are grappling with the challenges posed by ransomware.
Those were among the issues discussed during sessions of the Minneapolis-based Professional Liability Underwriting Society’s 2021 cyber symposium, which was held virtually May 5-6.
Joe Mann, CEO of Washington consulting firm Arete Advisors LLC, said there are about 30 ransomware variants circulating, with more criminals threatening to release exfiltrated data. “It just ratchets up the chaos and the crisis scenario that happens,” he said.
Criminals are more sophisticated and persistent, and activists, nation-states and disgruntled insiders continue to cause cybersecurity concerns, said Phil Venables, New York-based chief information security officer for Google Cloud, a Google LLC unit.
Insurance executives said the cyber insurance market may move toward securitization of cyber risk, although it will take several years for that market to develop.
Andy Marcell, New York-based CEO of Aon PLC unit Aon Reinsurance Solutions, said there are some coverages that can be isolated to create “discrete, bespoke coverages.”
“If we do our jobs correctly on the retail side, the demand for the coverage will increase” and create the additional capacity needed, he said.
Mr. Marcell said insurance and reinsurance brokers have to be able to provide some underlying data with regard to outcomes against a set of deterministic scenarios. “I think we will get there as an industry, hopefully,” he said.
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