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The insurability of systemic cyber risk will be one of the defining issues of the next decade for the (re)insurance sector. Rapid technological changes and digitalization in particular have already transformed the characteristics of risks assumed by the (re)insurance market.Businesses continue to embrace technological innovation despite the fact that doing so may lead to the emergence of new and unforeseen risks, according to Guy Carpenter colleagues Will Garland, President, Centers of Excellence, and Erica Davis, North America Cyber Center of Excellence Leader, Guy Carpenter. As cyber risk is one of the most swiftly evolving perils in the industry, carriers should carefully manage the exposures – and not only for competitive advantage. As regulators formalize capital requirements and qualitative measurements of risk appetite in this rapidly evolving market, companies will be required to enhance cyber underwriting and reinsurance strategies, leverage innovative modeling capabilities and develop technical and underwriting risk talent to continue offering clients the best security possible.
As companies depend more on technology to conduct business, they are also increasingly subject to technology’s unique vulnerabilities. These are wide-ranging and can include system or supply chain disruption or failures, distributed denial of service, hacking and ransomware attacks that …
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