‘Silent risk key barrier to cyber market growth’

A recent study by cyber risk-modeller X-Analytics has shown that silent cyber risks are among the major impediments to growth in the cyber re/insurance market, and that measurement of cyber risk in general is highly deficient among both customers and the wider re/insurance industry.

Non-affirmative cyber, or silent cyber, refers to instances where cyber perils like service interruptions or data breaches are neither explicitly included nor excluded by a re/insurance policy’s wording, according to X-Analytics.

A survey of 78 brokerages and re/insurance companies, which was sponsored by Secure Systems Innovation Corporation (SSIC), the cyber risk management firm that created X-Analytics, found that 77 percent of respondents believed the industry needs to urgently address silent cyber risks.

Additionally, 22 percent recognised that there was no way to swiftly resolve the issue of silent cyber risk, and 47 percent admitted they had no clear connection between core cyber peril events and cyber risk insurance cover elements in their policy wording.

When asked why cyber insurance is not purchased by more companies as a risk transfer option, respondents cited firms not understanding their own risk exposures as the main factor, followed by poor understanding of policy coverage and confusing policies.