From: Captive Insurance Times
Rebecca Delaney explores how the evolution of cyber risk has led to more companies considering captives to close coverage gaps left by the expensive commercial market
Universally recognised as a rapidly-evolving risk, cyber has seen an exponential expansion over the last decade in the use of online platforms for communication, retail, financial transactions, and just about every other staple of modern life.
Niel Harper, cybersecurity and digital policy expert at Octave Consulting Group, explains that cyber risks have evolved synchronously with this growing connectivity of companies, households and devices.
“Criminals have become more organised and professional as they seek to make money from stealing information and committing fraud, and we have seen noticeable increases in state-sponsored cyber attacks, including industrial espionage and critical infrastructure disruption,” he notes.
Cybersecurity as an issue accelerated to the top of companies’ agendas during the COVID-19 pandemic as entire work systems shifted online. This operational transition revealed cyber liability exposures and vulnerabilities within organisations, causing many firms to reassess their security protocols and processes.
Randy Sadler, principal at CIC Services, contends: “Cyber risk is ever-evolving, since cyber criminals are becoming increasingly more advanced and have quickly adapted. The COVID-19 pandemic exacerbated the situation by fast-tracking digital change. An increase in cybercrime emerged as businesses moved to remote work models that pose vulnerabilities, weaken systems and create exposure to breaches.”
In this current environment, characterised by accelerated implementation of digital transformation programmes — and as the velocity of digital change outpaces security — cyber threats are evolving into a form of disruption that organisations must learn to live with, rather than being able to eradicate entirely.