March ITL Focus: Cyber

ITL FOCUS is a monthly initiative featuring topics related to innovation in risk management and insurance.

This month's focus is Cyber

ITL Focus: Cyber


For me, the emergence of cyber insurance as a separate line dates back a decade, to when Target was hacked and had 40 million credit card numbers and personal information about 70 million customers stolen. Target was seemingly so well-protected, with its massive IT department and careful security procedures, and the vulnerability so seemingly trivial (in an HVAC system) that the news sent everyone scrambling. 
But what to do? 
Well, policyholders hoped their general liability policies covered cyber issues, or at least could be easily extended to cover those risks. Insurers, meanwhile, worked to make a clear division between GL and cyber and, in the face of such uncertainty and potentially enormous payouts, set rates as high as they could. Hackers, of course, plunged into what they saw as a huge payday. 
Ten years on, we seem to finally be approaching some stability. Yes, criminals have gotten much more sophisticated, moving well beyond hacks of credit card numbers and personally identifiable information to ransomware and other attacks that can shut down an entire business. Some even offer hacking-as-a-service or at least pool their efforts with criminals with expertise in certain parts of the hacking process. But insurers and their clients haven't stood still, either. They, in particular, have become better about training employees to avoid hackers and have developed much more sophisticated tools for spotting and stopping attacks. Governments have helped, too, by going after hackers, including tracking and recovering ransom payments made to them in cryptocurrency. 
No one is claiming victory. This is a Spy Vs. Spy scenario in which both sides will attack and counterattack as long as hackers see paydays to be had. But we do seem to have reached a much more mature understanding of the threat and of how to deal with it, both through better security and through insurance.
As you'll see in this month's interview, with Emma Worth Fekkas of Cowbell Cyber, the relentless increase in rates seems to have ended. In fact, she predicts rates will actually decline by the end of the year. 
Now, that's a change.

The cyber market has been in flux for about as long as it’s been around. New hackers use new techniques to exploit new vulnerabilities and use new methods of collecting ransoms. Meanwhile, victims and their insurers scramble to try to stay one step ahead of the bad guys, as rates rise – then rise some more. To sort through the latest trends, we sat down this month with Emma Werth Fekkas, RVP of underwriting at Cowbell Cyber. She offers any number of insights, including that those constant rate rises are likely a thing of the past. 

Read the Full Interview

"There’s definitely lively conversation in cyber right now, coming out of the hard market. Now is the time to do a post mortem, of what was working and what wasn’t? What can we now do as the market softens?" 

—Emma Werth Fekkas
Read the Full Interview



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Insurance Thought Leadership

Insurance Thought Leadership (ITL) delivers engaging, informative articles from our global network of thought leaders and decision makers. Their insights are transforming the insurance and risk management marketplace through knowledge sharing, big ideas on a wide variety of topics, and lessons learned through real-life applications of innovative technology.

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