As a result, insurers are revisiting their policies and enhancing their risk assessment processes. Another common exclusion are state-sponsored cyber-attacks. While first time buyers of cyber insurance policies have to complete a detailed application, existing buyers have been able to complete a simplified version. choose ProWriters to boost their business and their bottom line. If youre in a high-risk sector, such as critical infrastructure, technology, or finance, this form of coverage is crucial. Jacob Ingerslev is the Head of Cyber Risk at The Hartford. The Hartford shall not be liable for any direct, indirect, special, consequential, incidental, punitive, or exemplary damages in connection with the use by you or anyone of the information provided herein. InSights Please enable Strictly Necessary Cookies first so that we can save your preferences! like the professionals at ProWriters are experienced in the ever-changing risks associated with cyber coverages. The second is claims under new and evolving consumer privacy legislation, such as the General Data Privacy Regulation (GDPR), Biometric Information Privacy Act (BIPA), and California Consumer Privacy Act (CCPA). maximizing the benefits by making optimized policy recommendations. BitSight Security Ratings are a great way to prove your cybersecurity protection efforts to a cyber risk insurance provider. Regardless of whether attacks exploit zero-day vulnerabilities or use sophisticated malware hidden in software updates, the insurance industry will always have one fundamental problem: the twelve-month renewal cycle of most insurance policies. Early use of cybersecurity rating applications in the industry focused mostly on the score or rating given to a particular organization as a means for underwriters to compare the numeric value against the information provided in application forms. As with all matters of a legal or risk management nature, you should consult with your own legal counsel and other professionals. These technologies have become essential tools in setting the appropriate prices and establishing the cyber insurance premiums for clients. Indicates status vs. compliance requirements. Please update your Requiring a network business interruption supplemental questionnaire, asking specific questions around business continuity plans, incident response plans, and restoration and recovery procedures. CVEs are publicly disclosed software vulnerabilities, which are recorded in a database maintained by the MITRE Corporation. Sublinks, Show/Hide Cyber insurance underwriters benefit insurance brokers and agents by taking on a host of specialized tasks. And as wi 2022 BitSight Technologies, Inc. and its Affiliates. The cyber insurance underwriting process requires a significant dedication of resources. !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)? Resources Top Three Reasons to Work with a ProWriters, As cyber insurance products continue to change with a rapidly evolving industry, many insurance, , agents, and companies are seeing the benefits of finding an expert partner in the. The three flaws in classic security posture evaluation. These tools, typically cybersecurity rating applications, collect information from a number of different data sources, including vulnerability scans, threat intelligence, and cybersecurity research, and they use a proprietary algorithm to aggregate the data into a score, rating, and/or probability of loss. Sublinks, Show/Hide Co-Founder & CTO of Cymulate. Historically, cyber insurance renewal applications have required a minimal amount of high-level exposure information such as updated revenue, number of records, and only the material changes to the business or cyber security and data privacy practices. In short, underwriters actively work to increase your profits through specialized methods developed over years of experience. have a unique ability to find risk-management-oriented solutions that limit exposure and grow your revenue. While many tend to focus on client acquisition, client retention cannot be ignored, as its much less expensive to retain clients than acquire new ones. , and companies from non-profitable business opportunities. In fact, hiring a, can help with directly client retention, as research shows there is a proven and demonstrable, link between underwriting and client retention, While many tend to focus on client acquisition, client retention cannot be ignored, as its much less expensive to retain clients than acquire new ones. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. The Financial Impact of SolarWinds: A Cyber Catastrophe But Insurance Disaster Avoided? This means you dont take on the training and staffing costs associated with underwriting, and thats better for your business and your bottom line. Focusing on quantifiable and verifiable cyber resiliency is key to enabling cyber insurance underwriters to accurately evaluate the risk over extended periods. The ransomware epidemic has forced insurers to make necessary upgrades to their question sets and increasingly move away from the binary answer format that often leads to limited insights. When in doubt, ask your broker. To learn more about ProWriters industry-leading underwriting services. It saves brokers time and money, increases their profitability, improves their client retention, and offers competitive access. Elena ChenAccount Executive, Vice President, E&O/Cyber Liability Product Specialist. He joined The Hartford (through Navigators Group) in February 2017 and is responsible for the Cyber Risk and Technology Errors and Omissions product suite, underwriting strategy, and incident response solutions, and is leader of the enterprise Cyber Risk practice. The full format application forms that have been used in cyber insurance since its infancy are still part of the underwriting process and they too have improved in their scope and design. A failure to do so may result in a higher premium or declined coverage. At the same time, underwriting talent is becoming harder to find; , there is a 40 to 50% shortage in North America alone. And the right underwriting partner will go even further by giving you access to the top cyber insurance carriers and products on the market. It provides an idea of organizations' adherence to cyber hygiene but not whether it is applied in the most efficient way. Since its creation in the late 1990s, cyber insurance has gone through several evolutionary changes both in terms of the coverage provided in cyber policies and the process through which underwriters assess cyber risk. He started his 20-year insurance career in the Scandinavian insurance market underwriting Technology and Life Science risks and has held leadership positions with CNA Financial Corporation and the Chubb Corporation in both the U.S. and Europe. Before you sign on the dotted line, study your insurers contractual wording to avoid any misunderstanding of what is covered and whats excluded. The first one occurred in 2014 and 2015 following a series of large-scale data breaches that forced cyber insurers to rethink the way they assessed breach-related exposure. Its no surprise that, consider cyber to be a major area for future growth, and. According to a report from Deloitte Financial Services, underwriters can be the difference between 10% and 20% annual growth for insurance providers. have unique knowledge of risks and exposures and use years of experience to finely hone their skills. The way in which cyber risk assessment output is applied to the underwriting process has evolved significantly. Insurers use of tools to assess policy-holders security posture is not an entirely new underwriting approach in cyber insurance; however, these practices have become much more widespread than they were just a few years ago. This article provides general information and should not be construed as specific legal, risk management, or insurance advice. Insurers have valuable insights gathered from their portfolios claim statistics and are well positioned to provide policyholders with information about the most commonly exploited vulnerabilities and help them remediate issues . #0I27809 | specialize in protecting insurance agents. One last recommendation is to start early. Cyber Insurance Underwriters Save You Time and Money. , saving you a significant amount of time and money. This absolutely affects your revenue; data from, demonstrates that an increase in customer retention rates of just 5%, help you consistently capture revenue by improving client retention. Visit our, How to become a cyber insurance professional, How insurers should deal with silent cyber. I believe harnessing these new capabilities could revolutionize cyber insurance underwriting. Partnership And Protection: SMEs And MSPs, Africa's Chaotic Legal And Regulatory Cybersecurity Landscape Requires Harmonization, Why Great Technology Innovators Think About Platforms, Three Critical Risks Plaguing The Enterprise In The Age Of Digital Interconnectivity, The Four Biggest Obstacles To Strategic Planning, Crossing The Chasm Between S&OP And Autonomous Planning, What The SMB Loan Fraud Problem Means For API-Based Technology. Download the report to learn key findings, market implications, and recommendations. Requiring a ransomware supplemental questionnaire, asking specific ransomware threat-related questions around backups and recovery, multi-factor authentication, vendor management, email security, employee training, and other network protections. Lack of continuity. is good for business; and the professionals at ProWriters can help benefit yours with the institutional knowledge that comes from our 20 years in the industry. Sublinks, Show/Hide Hiring an experienced cyber insurance underwriter is good for business; and the professionals at ProWriters can help benefit yours with the institutional knowledge that comes from our 20 years in the industry. Your list should include relevant data points that prove your organizations commitment to sound cybersecurity. Cyber insurers have clearly shown an intent to reduce ambiguity in their policies. Even a comprehensive penetration test covering all known attack tactics, techniques and procedures available at the time of the test only provides a snapshot of the security posture. According to, a report from Deloitte Financial Services. Business interruption (BI) is another area of coverage where we are seeing changes in insurer appetite. This means that every time you visit this website you will need to enable or disable cookies again. The only question left is: why wait? Designed and built by Studio Praktik, Read more about the minimum requirements demanded by cyber insurers, Interested to learn more about the latest developments in cyber insurance? Underwriting is a unique component of the insurance industry, and taking advantage of professional underwriting services streamlines the cyber insurance underwriting process, saving you a significant amount of time and money. All of that is gradually changing and the explanation is the impact that the ransomware epidemic is having on both insurers and insureds. The SolarWinds breach is already one of the most significant cybersecurity incidents ever. Once these metrics are received, the next step is measuring trends and variance from pre-established baselines and preventing security drift. One example of a clearer policy event trigger isthe war exclusion found in most commercial insurance policies, which intends to exclude loss arising out of war, warlike actions, terrorism, or state-sponsored attacks. The second major shift is happening right now with the ransomware epidemic that started in 2019 and continues to worsen. The first is an increase in claims frequency and severity from ransomware attacks, which have led to more business interruption losses. By finding a qualified cyber, all of the analytics with respect to risk assessment and policy placement can be handled separately, freeing up resources to focus on high-level tasks like client retention. The underwriting talent at ProWriters is backed by decades of experienceand heres how those services can help you. A Fitch Ratings report says ransomware losses have contributed to an increase in U.S. (stand-alone) cyber loss ratios from 34% in 2018 to 73% in 2020. ProWriters offers unrivaled access to a network of top-rated and trusted insurance carriers. Sublinks, What is Cyber Insurance Underwriting, How Has it Evolved, and What to Expect When You Apply, evaluate the financial impact of a cyber attack on your business, compare your security performance to others in your sector, cyber insurance, what is and isnt covered, How To Build a Trusted Cybersecurity Program, What You Are and Arent Responsible for Under Cyber Risk Insurance. They focus on both prevention and recovery controls; one of the most effective measures to mitigate ransomware attacks is a recent, tested, and well-protected backup. Proceed with completing the application and then offer the underwriters a chance for a follow-up meeting or call. These applications are increasingly mandatory for organizations to complete when seeking cyber coverage or renewal of an existing policy. 2018 ProWriters Insurance Services, LLC | CA LIC. Many policyholders and their agents or brokers have not been fully aware of the benefits of the services, and the subscription is often an afterthought to the procurement of the policy itself. About Us Insurers want to know that your organization is taking steps to understand and act on these risks. Sublinks, Show/Hide Ransomware attacks have been rising at an alarming rate with victims ranging from one of the largest fuel suppliers in the United States to Irelands Department of Health. Cyber insurance underwriting is a process that insurance companies rely on to assess client risk, evaluate exposure, and model losses, such as the cost to recover from a data breach, ransomware attack, or other malicious cyber activity. requires a significant dedication of resources. Now, underwriters are asking for more details to better understand the risk they are insuring. All Rights Reserved, This is a BETA experience. By design, underwriters specialize in protecting insurance agents, brokers, and companies from non-profitable business opportunities. By checking this box, I consent to sharing this information with BitSight Technologies, Inc.toreceive email and phone communications for sales and marketing purposesas described in our. Visit our course catalog for more information on our cyber insurance training. According to research from, more expensive than retaining a customer you already have. Open ports are the virtual access points used by systems to connect with other systems over the internet in order to communicate. Cyber risk assessment tools provide insights into an organizations perimeter security, including two areas of cyber exposure of particular interest to insurers: open port vulnerabilities and CVEs, or common vulnerabilities and exposures. can be the difference between 10% and 20% annual growth for insurance providers. Insurers could leverage this dynamic scoring for two complementary purposes: During the pre-binding phase. SPACS: Special Purpose Acquisition Companies, COVID-19 will have on cyber risks this year. As with other application forms, some questions represent absolute cybersecurity requirements while others fall into the preferred category. In a technological landscape where infrastructure is in constant flux due to agile development and its resulting frequent pushing of new deployments, a yearly evaluation based on guesstimates opens the door to failure in uncovering newly introduced risks that will crop up even with adherence to best practices. Increased access to these benefits is one of the top reasons. 2022 Forbes Media LLC. Theyre used alongside findings from cyber risk assessment tools to provide insights into security domains, such as administrative security controls and recovery procedures, that cannot be determined by the signals picked up in automated network perimeter scans. If you disable this cookie, we will not be able to save your preferences. Subscribe to get security news and industry ratings updates in your inbox. Underwriters save you both time and money, making your job easier. to limit exposures and protect insurance agents and. Whether you are placing cyber insurance for the first time or headed into a renewal, preparation is going to be key to meeting the rigorous demands of the insurers. In some cases, answers provided in the application forms are compared against the risk assessment tool output to verify the accuracy of those answers. Legal | like the experts at ProWriters are an important part of that process. Many hackers rely on network and system vulnerabilities such as open ports, unpatched software, and misconfigured systems for their attacks. In fact, hiring a cyber insurance underwriter can help with directly client retention, as research shows there is a proven and demonstrable link between underwriting and client retention. At the same time, or as a consequence, cyber insurance premiums increased by 33.5% in 2020 alone, the extent of coverage is reduced, and insurers are increasingly relying on reinsurance. Insurance underwriters evaluate and analyze the risks involved in insuring people and assets. These tools can help underwriters evaluate the financial impact of a cyber attack on your business, compare your security performance to others in your sector, and assess cyber risk in your supply chain. This report from Gartner reveals cybersecurity predictions about culture, the evolution of a leaders role, third-party exposure, and the boards perception of cyber risk. As the World Bank Group explains in its Primer Series on Insurance, underwriting is an art and not a science. Underwriters have a unique ability to find risk-management-oriented solutions that limit exposure and grow your revenue. When you partner with a cyber insurance underwriter, you get more than just the baseline underwriting services. Show/Hide Some of the responsibilities underwriters have include: Cyber insurance underwriters like the professionals at ProWriters are experienced in the ever-changing risks associated with cyber coverages. Such services have been available for the past few years in cyber insurance, but the uptake rate has been fairly limited for a number of reasons. About Us We now commonly see underwriters delving deeper into the details around the specific practices, controls, and protocols in place to prevent or mitigate specific types of threats, such as ransomware attacks. Expertise from Forbes Councils members, operated under license. Today, modern cyber risk management can enable an accurate and comprehensive framework that: 2. Moreover, it does not evaluate the effectiveness of compensating remediation. During the post-binding phase. These tools allowed them to not only evaluate the level of cyber exposure more accurately but also to improve the quantification and pricing model. Interested to learn more about the latest developments in cyber insurance? As the World Bank Group explains in its, , underwriting is an art and not a science.. Sublinks, Show/Hide Solutions Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. Aim for 90 to 120 days ahead of the renewal or inception date. Sublinks, Show/Hide Next, begin gathering the information that potential insurance companies will need. And the right underwriting partner will go even further by giving you access to the top cyber insurance carriers and products on the market. Despite their flaws, these methods are widely used because insurers are not cyber experts and depend on consultants tofor better or worseassess the risk. Read more about cyber insurance, what is and isnt covered, and other things to look for in an insurer. Innovative coverages are no longer being thrown in to cyber policies. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. These can be exploited by threat actors and often have been by the time theyre disclosed to the public. PwC Cloud and Digital Transformation BrandVoice, How To Earn Cash Rewards For Everyday Spending. The new, more specific policy language provides affirmative cyber terrorism coverage and works in the insureds favor. Its just one of the reasons insurance. Another trend were seeing in response to increasing cyber risks is clearer policy language. Curbing cybercrime requires global cooperation and coordination, which may or may not ever take place. These tools are used to perform the following processes: Although cyber insurance underwriting is a relatively new discipline, the insurance industry is already embracing various tools that assist the underwriter and the broker in the process of assessing, quantifying, and benchmarking cyber risks. Every organization is vulnerable to a cyber attack. cookie settings to include "Targeting Cookies" to view this form: All views expressed in this article are the authors own and do not necessarily represent the Once a policy is secured, insurers can continuously monitor your organization's cybersecurity health and keep a pulse on emerging risk throughout the period of coverage. comes with a long list of benefits. Keeping this cookie enabled helps us to improve our website. He holds a BSc and Master of Laws degree from Aarhus University in Denmark. Conditioning the extent of the coverage to a preset variance from the baselines established during the pre-binding phase, calculated to allow for a correction time window in case of security drift following a new deployment push or the emergence of a new threat. Its no surprise that 80% of insurers consider cyber to be a major area for future growth, and cyber insurance underwriters like the experts at ProWriters are an important part of that process. The trajectory of cyber risks can be tackled from two different angles concurrentlyby curbing cybercrime and by raising the entry level for cybercriminals in breaching organizations' digital infrastructure. Insurers now increasingly use specific identified vulnerabilities to guide pricing, manage limits, set subjectivities relating to specific remediation requirements, and in some cases decline to offer a quote altogether. in-house. This absolutely affects your revenue; data from Frederick Reichheld of Bain & Company demonstrates that an increase in customer retention rates of just 5% increases profitability by 25% to 95%. It can also measure the extent and effectiveness of automated mitigation and attacks maximum reach. Before you continue reading, follow us on LinkedIn so you dont miss any important cyber updates: lang: en_US. Validates security processes and employee awareness. As a result, cyber insurers are tightening their underwriting guidelines and clarifying coverage intent in their policy language. Lets now turn our focus to some common approaches were seeing during the underwriting process today. Another recent underwriting requirement introduced by cyber insurers is the use of supplementary application forms specifically addressing ransomware controls. Copyright 2022 Cyber Insurance Academy | Registered as Cyber Advisory Excellence | Rothschild Blvd 45, Tel-Aviv | +972 5290594 On the other hand, even if cybercrime is expanding both in overall size and in attack complexity, emerging technology can limit the risk of successful breaches and, at the same time, increase cyber resiliency in case of successful breaches. All Rights Reserved. Underwriters have unique knowledge of risks and exposures and use years of experience to finely hone their skills. Tweets by @roughnotesco This means you dont take on the training and staffing costs associated with underwriting, and thats better for your business and your bottom line. Please provide your consent for cookies by using the Cookie Settings link below: Woodruff-Sawyer & Co. Insurance Services | Risk Management | Employee Benefits. Even with improvements from the use of cyber risk assessment tools and upgraded application forms, the vulnerabilities exploited in these attacks would likely never be caught by underwriters. You may opt-out by. Underwriting is a unique component of the insurance industry, and taking advantage of professional underwriting services streamlines the. In the past, when new coverages appeared in the market, they were made readily available by most insurers for little to no additional cost because they gave insurers a competitive advantage in a softening market. Why BitSight? To meet the fast-rising executives' interest in cyber insurance and cover the inflated cyber risk from insurers' and reinsurers' perspectives, a shift in thinking should focus both sides on risk prevention, improved visibility and quantification during the risk assessment phase. 4. Opinions expressed are those of the author. Hiring a cyber insurance underwriter comes with a long list of benefits. Other elements of a mature and established security management program that underwriters look for are a robust data management strategy, multi-factor authentication, network segmentation, and endpoint protection. While these have mostly been used for large account customers, theyre slowly being adopted in the upper middle market segment. Elena provides technical analysis and strategies for clients to address a wide variety of complex E&O and Cyber enterprise risks. It does not cover emerging threats, nor does it consider the changes in the infrastructure and the impact of newly introduced vulnerabilities. While policyholders and new buyers have to cope with increased scrutiny and rising premiums, more risk control benefits are now available to them. For that reason, theyre taking a proactive approach to incorporate risk control services into their underwriting requirements. As cyber insurance products continue to change with a rapidly evolving industry, many insurance brokers, agents, and companies are seeing the benefits of finding an expert partner in the cyber insurance underwriting process. Making recommendations for altering or cancelling coverage. Heres what you need to know to prepare if youre purchasing cyber insurance for the first time or headed into a renewal in 2020. Cyber insurance underwriters leverage their relationships to give insurance brokers access to new markets and the best-value cyber insurance options available. Underwriting for cyber insurance is relatively more complex for the following reasons: The task of cyber insurance underwriting is therefore to adequately assess the exposures faced by clients and to determine the extent to which those threats are being mitigated in the risk management process. All is not lost, however, since robust practices relating to patching of critical vulnerabilities and incident response can still mitigate the risk of even advanced persistent-threat attacks. Questions addressing such controls form part of most insurers applications and underwriters also increasingly require as part of the renewal process information on how organizations have responded to recent widespread events. Demonstrates the quality of the learning of the Cyber Insurance Academy and confirms that it meets CII/ Personal Finance Society member CPD scheme requirements. The must have controls typically include the following: Ransomware supplements are, as they say, supplementary. In short. Use of multi-factor authentication, either for all access or for remote or privileged access is typically one of the must-have controls, Frequent backups and protected backup storage, Disabled or protected Remote Desktop Protocol (RDP is a remote access tool commonly exploited for ransomware delivery), Confirmation that no end-of-life operating systems are used, Cybersecurity rating reports with identified vulnerabilities, Cybersecurity remediation and improvement assistance. Many of these application forms had become obsolete due to the constantly changing threat landscape and cybersecurity protection measures.