Cyber insurance not a risk management tool, say banks

Lengthy payout mechanism of cyber policies makes it ineffectual against large losses, dealers argue

Cyber policies have grown in availability and sophistication, but broad coverage appears to be low

Insurance is not an effective tool for managing the potentially vast exposure banks and financial services face from cyber attacks, according to senior industry practitioners.

Speaking at the Op Risk Europe conference in London on June 13, three senior operational risk experts argued that the lengthy claims and payout mechanism associated with most cyber insurance policies made it an ineffectual form of defence against large losses.

“Insurance isn’t a bad thing in itself, but I think [for]