Feds Explore Cyber Insurance Market

This week, the Big “I” submitted testimony to a congressional hearing on the current state of the cyber insurance market.

The U.S. House of Representatives Committee on Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies held the hearing, “The Role of Cyber Insurance in Risk Management.” The hearing focused on ways to develop, improve and expand the availability of cyber insurance. It also explored potential market-driven methods for promoting adoption of cyber best practices and addressed effective management of cyber risks through cyber insurance.

In its testimony, the Big “I” concentrated on the important role independent agents and brokers play in tailoring cyber insurance coverages to a business’ specific needs and cyber risk profile. The testimony also noted that the cyber insurance market must have the space it requires to naturally increase its capacity to meet consumer demands, and that cyber insurance is not a “silver bullet” solution but rather a balancing effort to enhance a business’ overall risk mitigation strategy.

Finally, the Big “I” cautioned that small and midsized businesses face different risks than large businesses, and any potential requirements related to data security and cyber insurance must not inadvertently disadvantage small business or stifle innovation.

Tuesday’s hearing was part of a broader effort by the federal government to explore the development of the cyber insurance market. Earlier this year, the Federal Insurance Office held a roundtable discussion on increasing cyber insurance supply and demand, in which the Big “I” was one of just two agent and broker groups to participate.

Moving forward, the Big “I” will continue to stay involved in any federal developments that could impact the emerging cyber insurance market.

Jennifer Webb is Big “I” federal government affairs counsel.