Cyber cover improving, but pricing does not make sense: Soler

Juan Gayá Soler, director of risk management at El Corte Inglés, the leading Spanish retail group, gave a speech on cyber risks at the recent annual conference organised by Spanish risk and insurance management association Agers. During the Madrid event, he said he had found adequate cyber risk coverage for his company’s risks, but pointed out that the market is developing very quickly and needs close attention.

“As a retail company, we are happy with (cyber risk) coverages available in the market…We have spotted some important risks that at first we did not have in our analysis, and we’ve incorporated coverages for those risks into the policy,” explained Mr Soler.

“When we started seeking a cyber risk policy, we were looking above all at (cyber) attacks that the company could suffer. But we have opted for a policy that covers us not only against external events, but also against system failures and mistakes that take place within the organisation,” added the risk manager.

Mr Soler advised fellow risk managers to be careful about how their cyber programmes are constructed. Risk managers must ensure that coverage truly reflects how data is managed – in-house or externally – by their company, he added.

“Another concern for us has been the fact that we have started to externalise our data centres. In this case, it is necessary to be careful because different coverages apply if we are managing our data centres ourselves, or if a third party is doing it for us. We have been able to find similar levels of transfer in both cases, so we are happy with the market in this aspect,” he said.

Mr Soler said he would like to see more affordable prices for cyber cover that would enable him to buy more capacity. The risk manager is not sure the market has quite worked out how to properly price this risk. “Nowadays, the market offers us capacities that are higher than what we are willing to pay for. The capacities are not exactly what we need, but they are higher than what we accept to pay for. We would like lower prices not to reduce premium costs, but to enable us to buy higher capacities…We have noticed much disparity between prices, coverages and deductibles…It seems that the market still does not know how to price the risk,” concluded Mr Soler.