In a recent article in the Financial Times, the chief executive of one of Europe’s biggest insurance companies, Zurich, has expressed concern that cyber risk may eventually become uninsurable given the continuing onslaught and magnitude of cyber breaches and impact on businesses and society at large.

CyberSolace certainly holds the view that cyber risk is not like traditional categories of insurable risks because there are no silver bullets for solving the cyber risk challenge.  It is a constantly moving target with ever evolving factors fuelling its prevalence and the variability of attack techniques.  Historic actuarial data alone may not be sufficient to help insurers predict or manage the risk adequately in the case of complex incidents.

Some insurers, like Zurich insurance in this instance, have publicly expressed concerns about the growing complexity and severity of cyber risks and have suggested that certain types of cyber risk may become uninsurable in the future.  However, it is important to note that these are just predictions and there is no definitive answer on whether or how cyber risk will become uninsurable.  There is currently no consensus on whether cyber risk will reach a point where it becomes too difficult or costly for insurers to provide coverage.  Some experts believe that the insurance industry will continue to adapt and evolve to meet the challenges posed by cyber risk, while others believe that certain types of cyber risk may eventually become too risky or expensive to insure.

Regardless of how the cyber insurance industry evolves in the next few years there is no doubt that finding the right cover is getting harder and more complex as insurers raise the bar of requirements, premiums and exclusions.  Hence it is paramount for businesses to carefully review their options and choose a policy that meets their specific needs and risk profile.  Or alternatively, conduct their own risk evaluation and make a strategic decision whether to self-insure or buy insurance from a provider.

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(source: Logo of Zurich insurance is seen at an office building in Zurich, Switzerland August 9, 2018. REUTERS/Arnd Wiegmann)