If Cyber Is Uninsurable, the United States Has a Major Strategy Problem

Abstract

The latest US national cyber security strategy makes a brief but important mention of the role of insurance in protecting the nation from cyber risks. This has become a salient reliance on an unpredictable actor, given the constraints on capital in the global cyber insurance market. While insurers have become more comfortable with cyber risk, there are still elements of it with which they are uncomfortable, particularly systemic and catastrophic risks. Unless insurers can find a way to get comfortable with systemic risk, there will remain a crack in the economic security elements of national cyber security strategy – in the United States and around the world. In order to meet the strategic expectations of the United States, the cyber market will need to continue its growth trajectory, with fresh sources of capital the key to successfully doing so.