What constitutes an effective cyber insurance market?

The American Property Casualty Insurance Association (APCIA) has joined forces with CyberAcuView to introduce a new research paper. This paper offers a comprehensive examination of data and trends within the cyber insurance market, delving into the challenges it encounters, shifts in underwriting practices, and the continuous transformation of cyber insurance within a rapidly changing technological landscape.

Entitled “Elements of a Productive Cyber Insurance Market,” this paper emphasizes that cyber risks are dynamic and ever-evolving threats, highlighting the necessity of an efficient market for cyber insurance products to meet the demands of consumers. Shelby Schoensee, the Director of Cyber and Legal Counsel at APCIA, stated that, given the ongoing development of the cyber insurance market, it requires time to mature and sustain its growth.

A steadily maturing market

The report reveals that the cyber insurance market is in a gradual process of maturation. It benefits from access to experiential data, strengthened underwriting procedures, investments from capital markets, collaboration with law enforcement and related security agencies to combat cybercrime, and initiatives aimed at addressing systemic risks for the benefit of policyholders and society as a whole.

Furthermore, the report emphasizes that a productive cyber insurance marketplace thrives on consistency and an appropriate level of regulatory flexibility that doesn’t overly burden insurers when adapting to changing consumer needs, expectations, and risks.

“To ensure the proportional advancement of available insurance solutions for managing emerging cyber risks, the market should be allowed to evolve and grow responsibly. Experience, innovation, and collaboration will demonstrate the potential of the private sector in expanding the cyber insurance market to benefit all stakeholders,” Schoensee remarked.