How continuous underwriting and adaptive cyber insurance are changing the market

by | Dec 1, 2022 | Innovation, Market Trends

No other line of insurance has seen an evolution quite like cyber. Starting as a simple add-on or endorsement to a BOP policy, insurance experts quickly realized that there was a need to roll out cyber as a standalone coverage. The benefit of standalone are multifold: better clarity over the policy terms, dedicated limits, a contribution to the elimination of silent cyber, and most importantly the ability to provide a variety of coverages that encompass the spectrum of cyber risks that organizations face nowadays. Standalone cyber insurance also enables a better definition of what is covered and what is excluded which delivers the clarity needed in a still fast-changing cyber threat landscape where the increase in claims frequency and severity has been the main challenge. 

With a standalone policy, small and medium-sized enterprises (SMEs) could finally cover more potential threats, as well as get more adequate limits than with a BOP policy and match the increasing financial risk of cyber attacks. This shift was further accelerated by the pandemic which forced businesses to close offices, digitize their business operations, and enforce work-from-home, a concept that made cybersecurity a lot more pressing and highlighted the lack of cyber best practices.

Today, most are aware of the importance of standalone cyber insurance, and Cowbell is focused on solving the next big pain point: Underwriting cyber accurately while cyber threats continue to change and evolve.

Underwriting for cyber has traditionally been performed once a year, which is where the problem lies. Within one year, a business can drastically improve its cybersecurity by implementing new safety measures, (one example being the activation of our Cowbell Connectors) or new vulnerabilities can show up that the business is not protected against, leaving them exposed and easy to target. An organization’s cyber profile can change within days. This is where continuous underwriting comes into play. 

Continuous underwriting follows the concept that a business should be continuously assessed – not just once a year, but throughout the whole policy lifecycle. This makes sense but is no easy task. It requires the built up of technology and the collection of a vast amount of data to support continuous risk assessment. 

This is exactly what Cowbell has been focused on since 2019. Starting with continuous risk assessment, Cowbell delivered on continuous underwriting with the ultimate goal to make adaptive cyber insurance a reality.  

Cowbell introduced adaptive cyber insurance earlier this year and is taking the lead in not just continuously underwriting risks but also helping policyholders reduce vulnerabilities and strengthen their cybersecurity posture. 

Every business can already access its cyber risk rating, or Cowbell Factors, at any time free of charge – even before becoming a policyholder. Cowbell Factors are continuously updated, benchmarking a company’s risk profile in different categories against their industry peers. The data that feeds into the Cowbell Factors are derived from the inside-out and outside-in using scanners, public data, dark web data, and more.

So how does adaptive cyber insurance work? With adaptive cyber insurance, Cowbell can use the Cowbell Factors to underwrite accounts continuously throughout the policy life cycle. Once we understand a business’s cyber risk posture, we can help them improve their cyber risk profile with the help of our risk engineering team and cybersecurity partners. Our marketplace Cowbell Rx features dozens of cybersecurity vendors who offer exclusive discounts to Cowbell policyholders. 


Continuous underwriting and adaptive cyber insurance are a win-win-win and deliver a positive outcome for policyholders, risk-bearing entities, and brokers. Policyholders gain important insights into their cyber risk, reduce the chances of a successful attack, and can optimize their premium for implementing certain cybersecurity measures. This also eliminates surprises when their cyber coverage is due for renewal.


For insurers like Cowbell, these incentives mean a better risk and smaller possibilities of losses. We already have numbers to show for this, having a level of reported claims that’s threefold below the industry average. This also makes us more attractive to reinsurers, since our risk portfolio is calculated and carefully selected.

Adaptive cyber insurance and continuous underwriting are the future of the industry, there is no doubt. We are continuously working towards a symbiotic relationship where all stakeholders – agents and brokers, businesses, and reinsurers – benefit from our cutting edge technology and innovation in cyber insurance. 

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