Cyber Insurance: A Helping Hand But Premiums Are RisingKelly Butler Says Underwriting Requirements Are Becoming More Strict
Cyber insurance can help defray costs associated with data breaches and ransomware attacks. But insurers have faced rising payouts associated with more severe incidents that have hit their clients.
Kelly Butler, who is chief client officer and cyber practice lead at the advisory firm Marsh & McLennan Companies in Melbourne, says the threat landscape has been volatile.
"It's fair to say it's been a volatile area in terms of the cyber risk landscape that we're seeing all across the world," Butler says. "But you know, more specifically for our region here in the Pacific, absolutely dominated by ransomware."
Butler says that insurers did anticipate that ransomware attacks were going to rise. But she says they did not anticipate the severity of the incidents and costs of incident response, business disruption and recovery. As a result, insurers have had to raise the cost of premiums.
Insurers are also asking more questions about their clients and potential clients about their state of cybersecurity readiness. That’s not bad, of course, but it does mean policies may be harder to obtain.
"Gone are the days when you can just complete a two- to three-page tick-box exercise proposal, which is pretty standard in insurance, but for cyber that clearly wasn't working," Butler says. "Insurers are definitely seeking a lot more information."
In this video interview with Information Security Media Group, Butler discusses:
- How cyber insurance policies are changing;
- What it means for those seeking or renewing policies;
- Why insurers are in a good position to collect metrics on the costs and impacts of attacks.
Butler is chief client officer and cyber practice leader with Marsh & McLennan Companies in Melbourne. She has worked across claims and crisis management in the insurance industry for more than 20 years.