Can Cyber Insurance Survive Without a Government Safety Net

The cyber insurance industry is grappling with a significant question: can it survive without government support in the face of escalating cyber threats? This question hinges on the controversial idea of a cyber insurance backstop, a government guarantee to step in if a catastrophic cyber event hits the industry.

The Need for Coverage

Cybersecurity incidents are on the rise, costing businesses trillions of dollars annually. Businesses are increasingly seeking cyber insurance to protect themselves from these financial losses. However, the cyber insurance market is still young and faces unique challenges. Cyber risks are constantly evolving and difficult to quantify, unlike traditional property insurance. This makes it difficult for insurers to price policies and assess risk accurately.