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of cyber insurance in terms of GWP is growing and is expected to reach US$13-25bn Market Report presented an analysis of the risks and trends associated with cyber
by 2025. With the increase in technology and digitization, annual economic losses from insurance coverage, cyber resilience in the insurance sector and the impact these
cyber incidents are estimated at over US$0.9trn. However, due to the small share of risks may have on financial stability. The IAIS Report finds that global cyber insurance
insured losses, the estimated protection gap remains at approximately US$0.9trn. premiums have continued to grow despite tighter terms and conditions and stricter
risk selection. Supervisors are actively developing and implementing macroprudential
Although the supply of cyber insurance is expected to grow, it is unlikely that the cyber supervision frameworks for cyber risks. These include incorporating cyber scenarios
protection gap will be closed soon due to the small share of insured losses today and the in stress tests, collecting data on common vulnerabilities, and supporting international
rapid speed of digitization, making businesses increasingly vulnerable to cyber-attacks. initiatives to enhance the resilience of the financial sector. Cyber underwriting activities
Furthermore, since they are dependent on the regulatory environment (e.g., incident- of insurers in the sample are not assessed to pose a threat to financial stability due to the
reporting standards) and public cybersecurity infrastructure, insurers will not be able to currently limited volumes of affirmative cyber insurance underwriting.
narrow the cyber protection gap alone (particularly for potentially systemic cyber risks),
meaning private and public stakeholders need to collaborate to address the fast-growing The IAIS also published an Issues Paper on Operational Resilience in May 2023 that
cyber protection gap. Individuals and organizations need to seek cyber protection and addresses three specific operational resilience sub-topics concerning areas the Task
proactively engage in prevention. Various potential levers exist for private and public Force considers as matters of significant and increasing operational risk, and therefore
stakeholders to use to address the protection gap. These include incentivizing and of immediate interest to supervisors - cyber resilience; IT Third-party outsourcing; and
supporting prevention; conducting awareness campaigns; developing incident-reporting Business Continuity Management.
frameworks; and fostering adaptation measures. The area of cyber risk and operational resilience continue to evolve rapidly; close
Global standard setters and insurance supervisors are also closely studying cyber risk coordination and ongoing dialogue between supervisors and industry continues to be
and operational resilience and the protection gap. The 2023 IAIS Global Insurance critical.