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Enhancing the Role of Insurance in Cyber Risk Management

image of Enhancing the Role of Insurance in Cyber Risk Management

The digital transformation of economic activities is creating significant opportunities for innovation, convenience and efficiency. However, recent major incidents have highlighted the digital security and privacy protection risks that come with an increased reliance on digital technologies. While not a substitute for investing in cyber security and risk management, insurance coverage for cyber risk can make a significant contribution to the management of cyber risk by promoting awareness about exposure to cyber losses, sharing expertise on risk management, encouraging investment in risk reduction and facilitating the response to cyber incidents. This report provides an overview of the financial impact of cyber incidents, the coverage of cyber risk available in the insurance market, the challenges to market development and initiatives to address those challenges. It includes a number of policy recommendations which support the development of the cyber insurance market and contribute to improving the management of cyber risk.

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Growing cyber risk and the contribution of insurance to cyber risk management

This chapter provides an overview of the context for this study, notably the increasing concerns about the implications of cyber risk, as well as some information on the survey undertaken for the purposes of informing this report. It also describes the potential contribution of insurance to managing cyber risk through: (i) supporting the quantification of cyber exposure; (ii) providing expertise on risk management and prevention; (iii) facilitating access to crisis management services; and (iv) encouraging risk reduction through premium pricing.

English

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