Report calls for improved risk sharing between companies, insurers and reinsurers - in particular by promoting the creation of captive reinsurance companies
The French risk management association, Amrae, has welcomed proposals set out in a policy report by the Directorate General of the Treasury, which sets out a series of proposals which would enable the state, private and public organisations to work together to create a viable cyber insurance market.
It hails the report - “The development of cyber risk insurance” - as a “major milestone for the cyber resilience of the economic fabric” and calls for rapid action to be taken to expedite the recommendations.
As a member of the working group that produced the report, Amrae has made strong technical and human contributions for over two years. It brought together the key players in the security of information systems, provided its market data from its LUCY studies and its expertise on captive reinsurance.
“The report paves the way for a rapid establishment of frameworks in which each of the players, including companies and the insurance industry, can evolve with confidence,” said Amrae in a statement.
”While this report is geared to focus on cyber insurance issues, it strongly highlights the need for prevention and awareness of cyber risk among businesses of all sizes.”
Overall, the working group formalised the need for standards adapted to the different sizes and activities of companies to guide an effective prevention and security policy adapted to their needs.
It proposed the introduction of regular assessments and support for the protection measures to be taken, and called for the strengthening of technical services for prevention and remediation in the event of an attack, including those provided at a national level.
The main measures proposed are:
• Increase companies’ efforts to raise awareness of cyber risk.
• Clarify the legal framework in the face of crimes and ransom demands.
• Comprehensively measure cyber risk with the creation of a database of all incidents and crimes, so that insurers can quantify their exposure on a concrete basis.
• Improve risk sharing between companies, insurers and reinsurers - in particular by promoting the creation of captive reinsurance companies in which part of the insurable risk would be “housed”.