Cyber security and cyber risk both topics are very high on the agenda of any organisation and its management. Mr Bernardino shares his reflections on how he sees the situation, what EIOPA is doing regarding cyber threats and what should be done to cope with the challenge at a global level.
Technological innovation is disruptive in particular for the insurance industry. However, at the same time, it drives growth through new business models, which require the new skills, proper governance and oversight.
These risks affect the insurance sector on two levels:
First, the security of the insurance business itself, and
Second, its role in covering and managing cyber risk.
Technology and innovation are fundamental to the development of new business models in the insurance industry. The growing use of huge volumes of personal information makes insurance companies a prime target for cyber-attacks, which according to international data, are growing rapidly, both in number and in sophistication.
A new European data privacy regulation came into force and it is the world’s most advanced legislation of its kind. It sets an extremely high standard for all organisations that handle personal information, imposing substantial penalties when requirements are not met and information is compromised.
All insurance market stakeholders must therefore be aware of the additional responsibilities stemming from this regulation and must do their utmost to implement processes to ensure that the information they hold is well protected.
Appropriate insurance can make a valuable contribution to managing cyber risk currently faced by businesses and organisations. A well developed cyber insurance market can help:
To raise awareness of businesses to the risks and losses that can result from cyber-attacks
To share knowledge of good cyber risk management practices
To encourage risk reduction investment - by establishing risk-based premiums
To facilitate responses to and recovery from cyber-attacks
Cyber security and cyber risk are at the forefront of the concerns of economic operators and public authorities. The insurance sector has an important role to play in establishing good risk management practices and the associated coverage.
Mr Bernardino concludes:
“The innovation and efficiency brought with the use of new technologies and high volumes of information will only become a reality if we find collective solutions to deal appropriately with cyber risk.
“As cyber-insurance markets mature, we should start to discuss if cyber insurance should also be mandatory. This would provide a further level of security for companies and consumers in the digital world. This is a universal challenge! Everyone has to contribute to meet this challenge!”
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