Cyber insurance is struggling to keep up with the fast-changing world of cyber threats. While the market has grown quickly, it still can’t fully match the rising skill of cybercriminals and the specific needs of different clients.
Barrett Wills, senior vice president of cyber at CAC Specialty, explained that hackers have become more specialized. Instead of handling an entire attack, some focus only on stealing data, while others sell stolen information. This makes cyberattacks faster and harder to predict. New risks like double extortion, supply chain weaknesses, and emerging tech such as AI are also increasing exposure.
To meet these challenges, insurers are tightening their rules and looking closely at risks in different sectors. Wills highlighted recent cyberattacks on UK retail companies and the growing attention on healthcare providers. But one size does not fit all. Smaller businesses often want plain, basic coverage, while large companies need customized policies that reflect their unique risks. Changes like acquisitions or shifts in business models require updated protection.
Networks connecting companies to vendors add new weak spots, especially when operational technology (OT) systems that were once isolated are now linked. More connections mean more points for attackers to exploit. In response, CAC Specialty has launched specialized cyber insurance for clients in utilities and energy to fill gaps that existing policies don’t cover.
Though cyber insurance has moved away from being part of general property policies to standalone cyber policies, problems remain. Minimum security standards are now required to get coverage, and these depend on the company’s size and industry. Education about both the benefits and risks of new technologies is key to staying ahead.
Wills also stressed that brokers need to do more than just renew policies once a year. They must stay involved throughout the year, regularly checking risks on both the client’s side and through their third-party connections, which can take years to fully understand. Pricing is still unpredictable, with some claim types raising ongoing challenges.
Overall, the cyber insurance market is growing and adapting, but it still faces many hurdles to match the speed and sophistication of cyber threats and the diverse needs of clients.