In the fourth episode of Resilience Rising, Sean Costigan, Managing Director of Resilience Strategy at Red Sift, delves into the intricacies of cyber insurance with Harpreet Mann, President of Amynta Trade Credit and Political Risk Solutions. Drawing on her extensive experience in insurance and risk management, Harpreet sheds light on the challenges and transformative potential of cyber insurance in today’s rapidly evolving threat landscape.
Navigating the challenges of cyber insurance
Cyber insurance has become a critical method for managing risk in this era of increasing cyberattacks. However, as Harpreet explains, the industry is grappling with a unique combination of high-frequency and high-severity events, including spectacular ransomware attacks, that challenge traditional insurance models. Unlike other insurance lines, which tend to balance low-frequency, high-severity risks or high-frequency, low-severity risks, cyber insurance struggles to maintain profitability under the strain of both.
Additionally, Harpreet addresses the concept of “silent cyber”—policies that fail to explicitly include or exclude cyber risks. This ambiguity has pushed regulators and insurers alike to clarify coverage terms, a move championed by organizations like Lloyd’s of London. Clear policy language is critical for managing expectations and ensuring alignment between insurers and policyholders.
Incentivizing better cybersecurity practices
One of the transformative opportunities in cyber insurance lies in its ability to drive improved cybersecurity practices. Harpreet explains how insurers reward businesses with robust cybersecurity measures by offering more favorable premiums. This creates a symbiotic relationship where insurers incentivize stronger defenses, ultimately reducing risk exposure for all parties.
However, she notes the challenges faced by smaller and medium-sized enterprises (SMEs), which often struggle to meet the stringent requirements for cyber insurance. Harpreet underscores the potential role of public-private partnerships, including reinsurance backstops, to make cyber insurance more accessible while fostering a culture of shared responsibility. After all, just over a year ago the head of Zurich, Mario Greco, told the Financial Times that cyber was shaping up to be “uninsurable.”
Geopolitical risks and cybersecurity
Our conversation also explores the intersection of geopolitical instability and cybersecurity. Harpreet cites the NotPetya attack on Merck as a stark example of how state-sponsored cyber warfare can destabilize businesses and nations alike. The growing use of cyberattacks as geopolitical tools underscores the need for comprehensive risk management strategies that address both the private and public sectors.
Harpeet Mann
President of Amynta Trade Credit and Political Risk SolutionsA path forward for cyber insurance
Looking ahead, Harpreet emphasizes the importance of adaptability in the cyber insurance industry. She envisions a future where insurers, regulators, and businesses collaborate to create more sustainable and precise policies. By addressing challenges such as ransomware coverage and clarifying war exclusions in policies, the industry can better serve its clients while maintaining stability.
Harpreet Mann
President of Amynta Trade Credit and Political Risk SolutionsListen to the full episode
Gain deeper insights from Harpreet Mann on how cyber insurance can evolve to meet today’s challenges by listening to the full episode of Resilience Rising. The discussion offers valuable perspectives for cyber and insurance industry professionals, policymakers, and anyone interested in the future of cybersecurity and risk management.
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Stay tuned for more episodes of Resilience Rising as we explore critical topics shaping the cybersecurity landscape.
