The first four months of the year have been flooded the cyber insurance market with a wave of news – some great, some not so good. Here is Cowbell’s summary of noteworthy activities that every cybersecurity or cyber insurance professional should be aware of.
Overall, the cyber insurance market is growing significantly faster than last year. One major change is that we no longer have to make the case for standalone cyber insurance. Everybody now understands that a standalone cyber policy comes with a dedicated aggregate limit and clarity in the policy of what is exactly covered or not. A standalone policy should also come with the ability to refine coverage selection to best fit the unique needs of individual risk.
When designing our Cowbell Prime 250 product, we paid specific attention to the wording. Our forms have been written with the policyholder in mind. Our coverages are organized in the way a policyholder experiences a cyber incident: first-party loss, first-party expenses, and third-party liability. We can only be proud of the positive response received by brokers and policyholders on this.
But let’s go back to key highlights for 2021 so far:
(1) Third-party and supply chain risks are under the spotlight:
After the Solarwinds disaster in December, several vulnerabilities in specific versions of the Microsoft Exchange Server emerged placing an estimated tens of thousands of businesses at risk of an attack. Microsoft responded quickly, dispatching security fixes in no time.
While this is scary, this is also an event where the vendor, security, and insurance community came together to respond as quickly as possible to help businesses remediate the issue.
Key takeaways: patching and system upgrade are incredibly important activities that IT teams should have on their priority list. If you outsource your IT services, demand that your 3rd party provider patch all systems all the time and with no delays.
(2) New York Department of Financial Services (DFS) cyber insurance framework:
After more of those incidents are being brought into the spotlight, it is not surprising that the Government is beginning to get more involved in trying to protect businesses appropriately. The New York DFS cyber insurance framework is a great example of what States can do to counteract those alarming developments. In an effort to increase the quality of cyber insurance policies offered, the framework offers a list of requirements that cyber insurers should follow. It entails 7 recommendations that all align with Cowbell’s philosophy: a preference towards standalone cyber in order to help reduce silent cyber, the use of a data-driven approach to risk assessment and underwriting for cyber, and the need to go beyond an insurance policy to educate the policyholder about cyber.
We applaud the state of New York for setting the bar higher for cyber insurers. This is fully aligned with our thinking about what an insurer needs to commit to when offering cyber insurance to businesses, as reflected in Caroline Thompson, Cowbell’s Head of Underwriting on the topic:
“The framework introduced by the State of New York complements exactly what Cowbell Cyber has been doing from the start: providing data-driven cyber risk assessment and clarity within refined underwriting.”
We’re proud to have launched an admitted, standalone cyber insurance program in the state of New York that abides by the guidance provided by the NY DFS.
(3) Underwriting for cyber is rapidly evolving
We also want to call your attention to a report by Deloitte on the evolution of cyber underwriting.
The cyber insurance space is naturally a data-driven market. In order for it to stay relevant, providers need to be able to adapt to the ever-changing cyberthreat landscape. This doesn’t only apply to coverage offerings and premium computations, but also the underwriting process itself. Manually underwriting every policy is not an effective way of guaranteeing adequate policies, deductibles, and limits for companies anymore.
The inevitable conclusion from the report is that technology needs to be used more in the underwriting process of cyber insurance.
Cowbell Cyber has been able to reinvent cyber insurance by applying data, technology, and artificial intelligence whenever possible in the insurance process. Our AI-assisted underwriting process brings precision and speed while removing bias and human errors. Our underwriting team is outperforming the market thanks to the support of our Cowbell Factors, deep insights, artificial intelligence, and automated workflows that enables them to operate quickly and accurately.
Lastly, the month of March was quite special with numerous announcements in cyber insurance, including funding. Cowbell proudly closed its series A and we continue to expand our team and our insurance programs with an outrageous sense of urgency. Come on board and join our team, get appointed to distribute insurance, or ask us to run an individual risk assessment for your business.