A CIFF speaker described the evolution of the market and the direction data breach coverage is taking.
Despite the growing popularity of cyber insurance policies, there remains a lack of consistency from one company’s offerings to the next. That said, recent industry forecasts suggest this trend may soon change.
The MSA Research Inc. CIFF panel discussion predicted a trend toward a more standard coverage.
The Canadian Insurance Financial Forum (CIFF) from MSA Research Inc. panel discussion recently held in Toronto showed that cyber insurance policies are headed within a consistent direction. As a result, there will be a more standard type of policy available for policyholders within the next few years, predicts John Elbl, one of the event’s panalists.
“Right now, because of the soft market, everyone wants a piece of the pie, so the exclusions are diminishing,” said Elbl, AIR Worldwide vice president. Elbl spoke in response to an inquiry regarding the way policies will come to address certain specific needs or reduce the number of exclusions currently present.
The prediction suggests that more similar cyber insurance policies will stock the market in half a decade.
The more case law evolves and builds in this area, the more cyber insurance coverage will become similar from one provider to the next. “I believe, say, easily five years from now, we’ll see a lot more similar cyber policies than a lot more divergent,” he said. This included coverage, exclusions, pricing and more. Elbl spoke on the panel discussion for “Pricing and Reserving Cyber Risk Products.”
At the same time, he did point out that it likely won’t reach the point that it will be as similar as certain other markets such as homeowners. That said, his forecast was for a far greater convergence than is currently being seen among cyber insurance company products.
At the moment, commercial cyber insurance makes up the greatest percentage of the overall data breach coverage market. The reason, according to Elbl, is that commercial writers are focusing on risk and how much they could potentially lose. That said, for personal cyber insurance policies, he hadn’t seen insurers taking that area very seriously as it wouldn’t provide much more than an endorsement to previously existing personal coverages.