The word cyber has just turned 31, having been coined in 1992. Yep, it has had a troublesome early developmental arc, but maybe it's finally getting ready to settle down and act like other property/casualty LOCs. ITL has just published an excellent interview (An Interview with Emma Werth Fekkas | Insurance Thought Leadership ) with Emma Werth Fekkas, RVP of Underwriting at Cowbell Cyber*. She sees some hints of good news concerning this difficult risk.
For one thing, the industry is developing better, more focused definitions of what is or is not covered. Right on top of the list is the question of war exclusion and what cyber terrorism is. Parallel with that is parsing the lines between cyber coverage and things like an old-fashioned business interruption. Better clarity and more experience or time over the target are also beginning to turn the rating around. Emma thinks that smaller companies, especially, will soon see a softer market and more competition between carriers.
She also sees a more typical relationship developing between the various parties: "There's going to be more and more partnership between cyber insurers and technology vendors to help companies see what they can do up-front to mitigate certain exposures." That sounds like what we've all been doing with our property loss and transportation risk lines for years. Of course, the hackers haven't gone extinct, although we are seeing better system security and better government prosecutions now. The hacker risk has been blunted, although by no means eliminated.
In short, cyber insurance is learning how to act more like its older siblings in risk**. This is all good news as virtually every type of enterprise becomes ever more entwined in the world of systems, apps, and APIs.
*Not quite a household name (yet), so check them out at https://cowbell.insure for more information.
**All good news in that stability in a LOC allows us to plan and integrate coverages efficiently. Unknowns are always expensive.
Author
Dr. Gary Anderberg
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