Fausto Parente, EIOPA executive director, has spoken on managing the risks of digital finance in cyber underwriting. He spoke of the value of data to insurers in enabling them to customise customer products, but the dangers where institutions do not hold data responsibly. He said EIOPA is paying particular attention to:
- fairness and non-discrimination including data biases and price optimisation;
- transparency and explainability; and
- governance.
The cyber insurance market will continue to grow and cyber resilience is key. He said lack of data is one of the biggest obstacles to understanding the fundamental aspects of cyber risk and provision of proper coverage, and so a standard cyber incident reporting framework would be important – this would enable sharing of aggregated data so that insurers can develop appropriate pricing and risk management models. EIOPA also calls for a common understanding of contractual definitions so that shared solutions can work.