[BreachExchange] 5 Ways CISOs Could Work Better with Their Cyber Insurers

[Audrey McNeil]

http://www.darkreading.com/risk/5-ways-cisos-could-work-
better-with-their-cyber-insurers/a/d-id/1328461

Cybersecurity risk management is undergoing one of the most important
shifts in recent memory — but this shift is not being driven by the
information security industry. Cyber insurance is emerging as a critical
new risk management tool for companies and, according to Fitch, it's the
fastest-growing segment in property/casualty insurance. But what does this
mean for information security professionals?

Corporate clients and insurance brokers from Allianz recently rated
cyberrisk as the third most important corporate peril, above fire, natural
catastrophes, and even macroeconomic developments. Too often, CISOs and
information security teams have cursory engagement with their cyber
insurer. This is bad for the CISO, bad for their insurer, and bad for the
cyber resilience of the company.

Forty percent of information security professionals don't fully understand
the "characteristics and limits of the company's cyber insurance coverage,"
according to a study conducted by SANS, and only 14% of insurance broker
respondents thought that CISOs fully understand and value the insurance.

Here are five ways CISOs should start engaging with their corporate risk
managers, brokers, and insurance carriers today.

1. Understand what cyber insurance coverage your company already has
purchased.
Coverage for cyberrisk is complicated because it can be purchased by itself
or embedded into other insurance lines such as property, general liability,
and crime policies. Knowing what is and isn't covered is an important first
step and will often require engagement with the risk management department
and the company's broker.

Many companies have notification requirements to get their insurer involved
in case of a breach. At worst, information security departments should be
aware of the policy and its requirements. At best, insurers should have
seen a large number of breaches and can be a tremendous resource working
through everything from coordinating vendors to offering advice and
mobilizing response teams.

2. Get involved with risk managers in the cyber insurance purchase process
and in insurance renewals.
Engaging with the information security organization can lead to better
premiums by allowing the company to display the security culture that
exists in the organization. A top-three broker reported that two airlines
with similar cybersecurity postures achieved a 30% differential in the
cyber insurance pricing, attributed to the confidence projected by an
engaged cybersecurity team in the purchase process and the "culture of
security" presented by the CISO.

CISOs are an important party in the insurer selection process. For example,
a Fortune 2000 technology company was using a leading managed security
services provider to oversee its cybersecurity. However, the vendor was not
on the insurer's incident response panel. This meant that in the event of a
breach, the company would not be reimbursed for the additional breach
response costs incurred with the managed security provider. Without
engagement from the CISO, the company could have purchased a policy that
prohibited their most trusted security partner from responding in a breach,
which had the potential to slow down the speed of response in a crisis.

3. Proactively provide information in the underwriting process.
Providing security information to an insurer is often misunderstood as a
game of "gotchas," but it's important to tell them everything. Insurers
want to avoid bad risks so they will be on the lookout for practices that
they deem risky and providing more information will enable more carriers to
quote insurance. Think of it like an auction of a piece of property. You
want as many bidders as possible, but providing only piecemeal information
creates uncertainty and lowers participation.

Research sponsored by Advisen shows that insurance brokers are frustrated
by divergent and sometimes conflicting expectations from underwriters.
Cyber underwriting is an evolving discipline that's slowly improving as the
industry matures and adopts new data modeling and software tools to make
better risk decisions. In the meantime, engaging proactively in the
underwriting process and having patience for the questions that insurers
are asking is an important step.

4. Security personnel should engage in a transparent dialogue about what
security they don't currently have.
It makes sense that an insurer covering the costs of a data breach wishes
to provide incentives to companies to purchase leading data loss prevention
software to protect that sensitive data. Similarly, if a company is
insuring against ransomware, which is almost exclusively delivered via
email, the implementation of email security filtering could be subsidized
by the carrier. Companies should understand that their insurer can be a
real partner in creating a more resilient cybersecurity program.

Carriers will often include free, trial, or discounted cybersecurity
services to their clients, but this requires engagement from the
information security team. Looking for security awareness training for
employees? In some cases, insurers will pay for services from a
cybersecurity organization.

5. Security professionals should openly share prior breaches with their
insurers.
It's better for a company to illustrate its awareness of its breach
history, the lessons learned, and plans to deal with future events. Too
frequently, insurance carriers witness risk managers and information
security leaders meeting for the first time in an underwriting meeting. To
make matters worse, sometimes it's the insurer informing the risk manager
of previous breaches that he or she was not aware of. This doesn't inspire
confidence in the insurer, who could be on the hook for tens of millions of
dollars in the event of a claim. Security professionals should be deeply
engaged with risk management and insurance buyers.

Security professionals should not see insurers or underwriters as an
unwelcome intrusion, second-guessing a company's security protocols, but
rather as a partner protecting the firm's assets, sometimes with tens of
millions of dollars of the insurer's money on the line. It's time for CISOs
and insurers to take one step closer and embrace each other in a united
front against cybercrime.
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