FERMA calls for collaborative approach to cyber

The Federation of European Risk Management Associations (FERMA) has called upon the insurance industry to adopt a more collaborative approach to cyber insurance which balances the risk appetite of the market with the coverage requirements of corporate buyers.

FERMA said that it has raised concerns that the cyber insurance market is evolving in isolation from the industries which it insures, and without more concerted dialogue between all parties – re/insurers, brokers, buyers (both largescale and SME), regulators, and service providers – there is a risk that the appeal of the cyber product for corporate buyers may decline due to increasing exclusions and more restrictive coverage which are reducing coverage certainty.

“The corporate market recognises the criticality of cyber insurance as well as the need for the insurance sector to manage its potential exposure to cyber risk, particularly given the systemic risk it poses,” said Philippe Cotelle, vice president of FERMA, and chair of the digital committee. “However, it is also important to ensure that the product remains attractive and efficient for buyers. Recent decisions to restrict the scope of coverage have created uncertainty regarding the ability of insurance to meet the evolving cyber risk requirements of policyholders, and in particular for larger corporations which in France, for example, currently make up over 80% of the cyber premium.”

To facilitate more constructive dialogue, FERMA has proposed the development of a COP-style annual cyber event, bringing together all key stakeholders to explore ways to develop and implement cyber resilience strategies of sufficient scope to address the myriad challenges of the digital age.