Cyber risk insurance

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Cyber risk is systemic in nature with any organization or company being under its threat one day or another. Corporate interdependence through networks, mobility of tools and new storage methods makes them even more vulnerable. All it takes is one weak link in the chain of partners for a breach to occur.

The cyber threat appeared in the early 2000s with the all-out development of IT, triggering a steady and uninterrupted growing trend. The cyber risk market, which originated in Anglo-Saxon countries, is relatively recent and remains poorly covered. A large number of small and medium-sized companies still do not have access to it, due to the lack of covers and adequate rates.

Faced with a risk whose economic damage is difficult to quantify, insurers and reinsurers remain cautious. This reluctance on the part of the main market players means that the insurance capacity available to policyholders remains below the real needs of companies.

The balance of the market requires the adoption of a series of measures including a legislative consolidation, priority given to risk prevention, a new definition of the coverage granted by insurers and an inevitable increase in rates.

All these measures are only valid if the states themselves do not wage a cyber war. In this case, no protection or rate increase is sufficient. The hazard disappears and the risk remains uninsurable by the traditional market.

Atlas Magazine N°196 December 2022 [1]