The issue of "silent cyber" exposures, where cyber coverage is neither explicitly provided nor excluded in insurance, remains a problem for the insurance sector despite efforts to call – close the risks.
In recent years, insurers have changed policy formulations and introduced sublimits to reduce their exposure to cyber risks outside of specialist cyber liability policies.
However, insurers are still concerned that they are effectively offering cyber insurance without charging any premium for risk if it is part of traditional policy.
Insurance companies have made progress in addressing silent cyber in recent years, adding exemptions or affirmative action coverage, but it remains a problem for the market, says Kelly Geary, New York-based national executive director of executive risk. and cyber with EPIC Insurance Brokers & Consultants.
Cyber risk is dynamic and "can always exceed the industry's efforts to limit it," Geary said.
Insurers have been concerned that they may be inadvertently liable in policies that are not intended to cover cyber risks. Moody & # 39 ;s Investors Service Inc. said in a February report that many commercial insurance and reinsurance companies reduced their silent cyber exposure by shifting cyber risk to stand-alone policies or introducing cyber sublimits or exceptions into traditional policies.
On Monday, Lockton Cos said. LLC it offered a "silent cyber real estate solution" with a London-based cyber and real estate insurance consortium.
While many insurance companies have taken steps to isolate the risk, more work is needed, says Nadia Hoyte, New York-based US practice. leader of USI Insurance Services LLC.
She said there may be some "overlap" with insurance policies for leaders and officials, she said.
Tim Zeilman, Simbury, Connecticut-based global cyber product owner at Hartford Steam Boiler Inspection and Insurance Co., said that although it has been talked about for many years, "companies are probably in a variety of stages" when it comes to taking deal with silent cyber.
He said that Hartford Steam Boiler and the parent company München Reinsurance Co. in recent years has undergone "A fairly extensive, internal effort to take care of it."
James Burns, London-based cyber product manager for CFC Underwriting Ltd., said: “Many measures have been taken to address silent cyber through specific cyber risk exclusions and transformation languages to explicitly cover and charge a price for it. "
The challenge is that some policyholders have potential gaps in coverage or discover that they are being asked to pay for something they previously thought was free," he said.
"It will differ from company to company," said Brad Gow, Purchasing, New York-based cyber product manager for Sompo International Holdings Ltd.
For the past three years, Sompo has had a formal program to review its various areas of activity to identify where silent cyber coverage may be located and address it.
Tom Srail, vice president, cyber risk team, for Willis Towers Watson PLC in Cleveland, said that silent cyber is still a concern, but it is not among the top ten concerns about insurance "we talk about daily." Catalog