target audience: TECH SUPPLIER Publication date: Aug 2024 - Document type: Market Note - Doc Document number: # US52459324
Cyberinsurers Are Struggling and Looking to Congress for Help
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Abstract
This IDC Market Note discusses how cyberinsurers are struggling and look to congress for help. On June 27, 2024, a congressional hearing was held regarding cyberinsurance with the intention of understanding how cyberinsurance is being utilized by critical infrastructure organizations. This has become a critical issue given the increased warnings of potential hacking from China and Russia. Cyberinsurers have expressed that they need more flexibility in determining what they will and will not cover in their cyberinsurance policies. The problem stems from the desire of cyberinsurers to use historical data as they have done for years in the non-cyberworld to work their financial models and underwrite policies. There is little to no historical data to base their premiums on in the event of a cyberincident. Cyberincidents are continuously increasing in sophistication and end up being completely different from prior or historical incidents. Rather than bringing innovation to the cyberinsurance world, the cyberinsurers' answer is to make cyberpolicies fit cyberinsurers' needs, which is why cyberinsurers are requesting flexibility in coverage offerings and suggesting that companies should not standardize on cybersecurity policies.