The European Insurance and Occupational Pensions Authority (EIOPA) has published a short note setting out its strategic priorities regarding the European cyber insurance market.
EIOPA sees a functional cyber insurance market as being critical to the digital economy. While the cyber resilience of insurance undertakings (and other financial sector entities) has been a central focus for regulators recently, there has plainly been a realisation that this alone is not sufficient for the digital economy to flourish.
The note sets out four objectives, which seek to ensure that:
- the cyber underwriting and risk management processes employed by insurers are appropriate;
- the correct tools are in place to identify and mitigate potential systemic cyber risk;
- both policyholders and insurers understand the contractual terms governing cyber insurance products; and
- there is sufficient information available to enable the development of better quantitative models and therefore better pricing.
A number of strategic proposals are set out to achieve these aims, which include updating EIOPA’s stress testing framework to include cyber risk/loss and, predictably but usefully, engaging more closely…
