Federal agency sees need for $1 billion cyber coveragePosted On: Sep. 28, 2015 12:00 AM CST
The Federal Insurance Office will continue to monitor the growth of the cyber insurance marketplace, according to a report issued Monday by FIO.
“Recently, concerns have been raised regarding the capacity and scope limitations of the cyber risk insurance market, with some market participants describing market capacity for cyber risks as 'very small' and observing that billion dollar coverage limits are needed to adequately address the losses posed by cyber risks,” said FIO in its third annual report on the insurance industry.
The report cited estimates that the U.S. cyber insurance market is in excess of $2 billion.
FIO said underwriters should continue to improve processes for cyber risks. Doing so would include pooling insurance data and continuing to build expertise on cyber risks.
FIO said it would continue to monitor the development of the cyber insurance marketplace.
In the report, mandated by the Dodd-Frank Consumer Protection and Wall Street Reform Act of 2010, FIO also noted that President Barack Obama signed into law this year a measure that establishes a National Association of Registered Agents & Brokers to streamline the licensing process for insurance producers.
FIO said that in its role as an adviser to the Treasury Department on insurance issues, it supports the effort to establish a board of directors for NARAB as well as implementing the law and will monitor the governance and operation of NARAB to “ensure that it meets the objectives of the law.”