Supply chain biggest challenge for cyber security
Source: Middle East Insurance Review | Feb 2024
Supply chain security is the biggest challenge for cyber insurance buyers, according to global insurance broker Marsh. Addressing a recent media briefing, Marsh also predicted that cyber insurance rates will continue to fall during 2024.
Marsh UK cyber leader Kelly Butler said supply chain vulnerability to cyber attack is ‘without doubt’ the biggest challenge facing clients today. Supply chain risks need careful attention through due diligence applied to all parties companies work with.
Marsh said at a big complex organisation with thousands of suppliers, you have to be very good at organising and understanding how you manage those third parties that service your business. You have to target your limited resources to protect the ones that mean the most to your organisation.
Marsh is working with clients to make sure they are conducting thorough risk assessments and implementing multi-factor authentication. The importance of strong vendor management cannot be overemphasised, and companies need to carry out due diligence about who their suppliers are and what they do.
Buyers have welcomed rate decreases in the cyber insurance space this year. Marsh anticipates that rates will continue to fall into 2024. Marsh’s global placement team saw average cyber insurance rates drop 8% in third quarter of 2023 for UK and international business transacted through London, including primary and excess layers, with rate decreases now into double digits across its portfolio.
Cyber is a growth area for insurers, which bodes well for rates. Marsh expects rates to continue to decrease into at least halfway through this year.
Catastrophic risk also continues to loom large over the cyber insurance market, with exclusions, particularly around war, coming into play. M