INSURANCE IS SEXY— Grand Dame of Insurance, Cyber Diva, Speaker of All Things Insurance Havemercycyber.com
Cyber Coffee Break I didn't know what I was going to post about until an hour ago when Barry Rabkin woke me with his post: IBNR Many agents today don't even know its meaning. Incurred but not reported. Insurance companies keep a little pot of gold in reserves somewhere because they know, particularly in the GL and ML world that this will happen. The actuaries over time, have been able to estimate what it could be and so far, have done a pretty good job on those reserves. Barry's point being, how do you reserve what you don't know exists with cyber as it grows exponentially, and now we are adding AI to the pot. Barry sure knows how to stir the sh#t. This is cyber's Achilles Heel. So many cyber incidents occur every day that never get reported that may cause claims down the road, its unfathomable. They don't get reported out of fear of losing clients, or looking dumb or just not caring because someone thinks it doesn't matter. It does. It will. Now, what do we do about it. Barry may be right. Cyber may not last, at least as we know it. #cyberinsurance #cybercoffeebreak #insuranceissexy #womenininsurance #womeninconstruction #womeninmanufacturing
Audry Torrence
7mo
IBNR = “I’ll Bet Nobody Reviews…” especially in Cyber.
I miss Barry on LinkedIn. Great post Mercy Komar, CIC, CyRM, MLIS, CCIS.
Tim Bennett
7mo
I like how you describe IBNR as a pot of gold. Smart companies make money off of IBNR. It’s like the proverbial having your cake and eating it too. You collect premium, put a piece of it aside for unknown liabilities, avoid taxes, earn money on it while it’s there, and deploy it later as needed. IBNR reserves can be used to smooth out higher than expected loss years, especially when the carrier has shareholders to please and a nervous market that may view a particularly bad loss year as imminent doom for that carrier. When I was on the carrier side, I worked with companies that kept IBNR to an absolute minimum. Others used it more strategically. The latter always seemed more stable over time as they were able to avoid some volatility in those really bad years. Regardless of how they come to an amount to put into IBNR, cyber seems ripe for a line of business to be strategic about IBNR. Particularly because of the vast amount of unknowns.
Helping businesses understand, manage, and mitigate cyber risks. ♦Transportation, Trucking, Logistics ♦FTC Safeguards ♦HIPAA Compliance ♦
7moYour posts are always so insightful and give me a lot to think about! It will be interesting to see how cyber insurance adjusts to the ever-evolving cyber-threat landscape. I see the applications becoming longer, the questions getting deeper and the security prerequisites becoming stricter. Things are certainly changing... we see the attacks firsthand every day. Criminals are more savvy and sophisticated than ever - it's a profitable business! And SMBs too often fall into the trap of thinking they are too small to be on the criminal's radars or it won't happen to them. You're not too small to be hacked... your just too small to make the news... and (like you said) many aren't reporting at all for fear of reputational damage, loss of customer trust, etc. 2024 is not the time to stick your head in the sand and pretend it's not happening. This is reality and we must remain vigilant, help customers forecast accurate IT budgets, implement proper cybersecurity measures for what they can secure and obtain adequate insurance policies for what they can't. Small businesses are the heartbeat of America. When we protect business, we protect the overall cyber-resiliency of our country. Keep spreading the good word... I know you will!