Cyber insurance struggles to overcome concerns over coverage
Cyber risk is a new and rapidly developing threat, and this means that risk transfer through insurance, helpful in other areas of operational risk, is of only limited use as a defence against it
With cyber attack now acknowledged as no longer merely a nuisance but a serious menace to organisational survival, the financial sector faces the traditional three options for handling such risks: reduce, transfer or accept. Transferring the risk by means of an insurance contract is tempting – the Basel capital adequacy rules explicitly encourage it, offering up to a 20% reduction in operational risk capital to banks using the advanced measurement approach if they incorporate the effects of
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