The Federation of European Risk Management Associations has called upon the insurance industry to adopt a more collaborative approach to cyber insurance, further to its concerns that the market is evolving in isolation from insureds.

Without more concerted dialogue between all parties – re/insurers, brokers, buyers, regulators and service providers – its says there is a risk that the appeal of cyber cover for corporate buyers may decline due to increasing exclusions and more restrictive coverage.

Philippe Cotelle, vice-president of FERMA and chairman of the Digital Committee said: “The corporate market recognises the criticality of cyber insurance as well as the need for the insurance sector to manage its potential exposure to cyber risk, particularly given the systemic risk it poses. However, it is also important to ensure that the product remains attractive and efficient for buyers. Recent decisions to restrict the scope of coverage have created uncertainty regarding the ability of insurance to meet the evolving cyber risk requirements of policyholders and in particular for larger corporations which in France, for example, currently make up over 80% of the cyber premium.”

To facilitate more constructive dialogue, FERMA has proposed the development of a COP-style annual cyber event, bringing together all key stakeholders to explore ways to develop and implement cyber resilience strategies of sufficient scope to address the myriad challenges of the digital age.

Typhaine Beaupérin, CEO and secretary general of FERMA, added: “To ensure the establishment of a robust and sustainable cyber insurance market for the long-term, it is imperative that all participants are contributing equally to its development. Improved dialogue will not only help ensure a product which is fit for purpose but also help build stronger relationships between cyber insurance buyers and the market itself.”

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