Cyber Captives Address Specific Exposures of Individual Companies
June 30, 2022
The maturing market for cybersecurity is a further iteration of business evolution toward near-total electronic interconnection, according to Timothy Powell, head of financial lines and cyber at Zurich. “People are becoming more aware of risks as a result of this interconnectedness, and that awareness is driving insurance and risk management,” he says. The commercial cyber insurance market has evolved rapidly too, but toward a wide variety in risk appetite for cyber coverage, high premiums, reduced insurer capacity, and tighter underwriting criteria. Companies are turning to captive insurance to finance cyber risk and address coverage gaps. “Many are struggling to adequately cover their cyber risk in the traditional market and are looking at alternatives,” says Alex Gedge, senior captive consultant at Hylant. Captive can be tailored to the specific exposures of an individual company. It can help cover vulnerabilities and key areas where traditional insurance coverage fails, as well as support operations through risk mitigation controls.
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