Ferma plans moves to boost cyber insurance

Ferma is planning guidance on buying cyber insurance to help risk managers obtain cover that better reflects their needs. Following the publication of its cyber risk management and governance guide in June 2017, Ferma envisages publishing guidance later this year on purchasing cyber insurance. The report would be intended as a tool to help risk managers compare different cyber insurance offerings, as well as provide advice on the preparatory steps risk managers should take in advance of buying cyber insurance. Although the cyber insurance market is developing well, it is often difficult for risk managers to understand the coverage on offer, according to Ferma president Jo Willaert. “There are some good cyber insurance products on offer, but not all are fit for the purposes of risk managers, while cover is often not clear for customers,” he told CRE. “Our report would provide a useful tool for risk managers to compare the different offerings of insurers and assess whether they match up with their organisation’s needs,” he said. Ferma had previously highlighted the need for the views of corporate insurance buyers to define a common language for cyber insurance. In November 2017, the federation welcomed the European Union Agency for Network and Information Security report on commonality of risk assessment language in cyber insurance, but said the buyers’ perspective was missing. The French risk management association AMRAE has recently published a technical guide to the General Data Protection Regulation (GDPR), with more cyber risk-related research in the pipeline. Ferma also plans work on natural catastrophe risk in 2018. Last year saw insured natural catastrophe losses of more than $130bn, making 2018 one of the worst years on record for insured losses. “While the events of 2017 were a reminder of natural catastrophe risk, this has been an area of growing concern for the past 20 years,” according to Mr Willaert. Ferma is currently working on its response to a European Commission consultation on climate change adaptation. In December 2017, the Commission launched its evaluation of the EU Strategy on Adaptation to Climate Change, first adopted in 2013 to increase the resilience of member states to climate change. The consultation includes an ‘action’ on the role of insurance in promoting resilience, which Ferma aims to respond to before the March deadline. The EC says it would like to improve market penetration of natural disaster insurance and use insurance pricing to promote prevention and mitigation. “Natural catastrophes are seen as a risk, but how companies adapt to climate change is also a business opportunity,” said Mr Willaert. By focusing its work on cyber and natural catastrophe risk, Ferma is addressing two significant concerns of risk managers and their organisations. Mr Willaert noted that the recent WEF Global Risk Report highlighted a shift from economic risks after the financial crisis towards growing concern for those risks linked to technology and the environment. The Ferma Seminar in Antwerp this October will focus on cyber risk and sustainability, which will include climate change and natural catastrophe risk. Ferma is also keeping a close eye on the EC’s review of class action mechanisms in the EU. The commission is currently reviewing the implementation of its Recommendation 2013/396/EU on 15 August 2015. The resulting report will assess collective redress systems across the EU, and whether they are effective in giving consumers access to justice. “This is an issue being discussed and we remain vigilant,” said Mr Willaert.

Ferma plans moves to boost cyber insurance

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