Cyber insurance is one lever that could reduce the impact of cyber risk.8 Although interest in its role is not new,9 the growing impact of cyber risk has brought it to the forefront of government and business agendas. This is partly because cyber insurance enables organizations to transfer financial risk related to a cyber incident or attack. In addition, cyber insurers may be well placed to incentivize better cyber security practices as they can reward good risk management, offer discounts in exchange for implementing security controls or standards, and provide cyber security services that some organizations may otherwise struggle with to access. Cyber insurers may be uniquely placed to address cyber risk at scale as they have a financial incentive to reduce claims and losses. Cyber insurance has also received significant negative media attention, particularly around the perceived non-payment of claims and its role in the ransomware epidemic.10 The industry faces growing criticism that it is incentivizing ransomware attacks by facilitating payments to organized cybercriminal groups, including those sanctioned by the US Treasury.11 One notable intervention came in January 2021, when the former head of the UKs National Cyber Security Centre (NCSC) said insurers were funding organized crime through ransom payments.12 In addition, losses from ransomware are helping drive up premiums and even pushing some carriers to withdraw from the market.13.

Refer to Cyber Insurance and the Cyber Security Challenge document attached. Discuss the following:

1. What is cybersecurity insurance? Why is it important?
2. Summarize the role of cybersecurity insurance in our current time.
3. Discuss two challenges insurance companies face in providing the policies.
4. What are your recommendations for Insurance companies in Bahrain?

Instructions:

• You are required to answer both sections.
• The word limit is 1500 for each section.
• Use at least two external references in your project.