text: Analysis of Challenges and Perspectives of OESs February 2023

text: As defined in the Article 5(2) of the NIS Directive: the criteria for the identification of the operators of essential services are the following: (i) The entity provides a service which is essential for the maintenance of critical societal and/or economic activities. (ii) The provision of that service depends on network and information systems. (iii) An incident would have significant disruptive effects on the provision of that service. 3 https://www.enisa.europa.eu/publications/cyber-insurance-recent-advances-good-practices-and-challenges 4 https://www.enisa.europa.eu/publications/commonality-of-risk-assessment-language-in-cyber-insurance

text: A complete overview of the publications reviewed can be found in the Annex A. 6 See: Information security management — Guidelines for cyber-insurance ISO/IEC 27102:2019

text: Western and Southern Europe Eastern Europe Cyber insurance northern Europe

text: No 55 % 61 % 88 %

text: Yes 45 % 39 % 12 %

text: NIS Investment report 2021: https://www.enisa.europa.eu/publications/nis-investments-2021

text: How did the insurance company conduct the intake assessment? Total

text: Questionnaire 14 Questionnaire + interviews 12 Questionnaire + interviews + request of documentation 11 Questionnaire + request of documentation 10 Other methods 3 Questionnaire + Interviews + request of documentation + third party assessment 3 Interviews + third-party assessment 2 Interviews + request of documentation 2 Interviews 1 Request of documentation 1 Questionnaire + third-party assessment 1 Questionnaire + other methods 1 Third-party assessment 1 Interviews + request of documentation + third-party assessment 1 Questionnaire + request of documentation + third-party assessment 1 Grand total 64

text: In line with the ENISA report: ‘Cyber Insurance: Recent Advances, Good Practices and Challenges’, third party risks are risks that might initially affect someone other than the insured (first party) or insurer (second party), against which an insured would like to have coverage.

text: In case insurance coverage is identified as a mitigation measure, Total who is responsible for procuring cyber insurance in your organisation? No response 19 CFO or financial team 37 CISO or security team 34 Dedicated insurance manager or team 67 Executive manager 66 Other, please specify 39 Grand total (N) 262

text: Analysis of Challenges and Perspectives of OESs

text: February 2023

text: (Only presented if respondent has cyber insurance: presentation contingent on answer to question 10) 10. Does your organisation currently have cyber insurance? 11. Has your organisation identified cyber insurance as a risk mitigation tool? 12. Has your organisation evaluated a concrete cyber insurance offer before, or would your organisation consider it in the future? 13. Who supports your organisation during the initial orientation and selection process to buy cyber insurance? 14. Who would support your organisation during the initial orientation and selection process of buying cyber insurance? 15. How did your organisation come to know about cyber insurance offers? 16. How satisfied are you with the offered cyber insurance coverage with respect to your risk exposure? 17. Which are or which would be your organisation’s main selection criteria for acquiring cyber insurance services and products by your organisation? (Please select that apply)

text: (Only presented if respondent has cyber insurance)

text: (Question only presented if respondent has cyber insurance)

identifier: Demand Side of Cyber Insurance in the EU

amnesord:
Cybersecurity of Critical Sectors
State of cybersecurity in the EU

publisher: Europeiska unionens cybersäkerhetsbyrå

sprak: en

title: Demand Side of Cyber Insurance in the EU

serie: rapporter

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU Analysis of Challenges and Perspectives of OESs FEBRUARY 2023 0

type: rubrik

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU

text: ABOUT ENISA

text: The European Union Agency for Cybersecurity, ENISA, is the Union’s agency dedicated to achieving a high common level of cybersecurity across Europe. Established in 2004 and strengthened by the EU Cybersecurity Act, the European Union Agency for Cybersecurity contributes to EU cyber policy, enhances the trustworthiness of ICT products, services and processes with cybersecurity certification schemes, cooperates with Member States and EU bodies, and helps Europe prepare for the cyber challenges of tomorrow. Through knowledge sharing, capacity building and awareness raising, the Agency works together with its key stakeholders to strengthen trust in the connected economy, to boost resilience of the Union’s infrastructure, and, ultimately, to keep Europe’s society and citizens digitally secure. More information about ENISA and its work can be found here: www.enisa.europa.eu.

type: stycke

text: CONTACT

text: For contacting the authors please use team@enisa.europa.eu For media enquiries about this paper, please use press@enisa.europa.eu.

text: AUTHORS

text: Javier GOMEZ PRIETO, Athanasios DROUGKAS (ENISA), Jelger GROENLAND, Alessandro LAZARI (Experts).

text: ACKNOWLEDGEMENTS

text: To all stakeholders who contributed to the elaboration of this report, including operators of essential services (OESs) who responded to the survey, interviewed experts and colleagues who provided feedback, especially colleagues of the European Insurance and Occupational Pensions Authority (EIOPA).

text: LEGAL NOTICE

text: This publication represents the views and interpretations of ENISA, unless stated otherwise. It does not endorse a regulatory obligation of ENISA or of ENISA bodies pursuant to the

text: Regulation (EU) No 2019/881

text: ENISA has the right to alter, update or remove the publication or any of its contents. It is intended for information purposes only and it must be accessible free of charge. All references to it or its use as a whole or partially must contain ENISA as its source.

text: Third-party sources are quoted as appropriate. ENISA is not responsible or liable for the content of the external sources including external websites referenced in this publication.

text: Neither ENISA nor any person acting on its behalf is responsible for the use that might be made of the information contained in this publication.

text: ENISA maintains its intellectual property rights in relation to this publication.

text: COPYRIGHT NOTICE

text: © European Union Agency for Cybersecurity (ENISA), 2023

text: This publication is licenced under CC-BY 4.0 “Unless otherwise noted, the reuse of this document is authorised under the Creative Commons Attribution 4.0 International (CC BY 4.0)

text: licence https://creativecommons.org/licenses/by/4.0/). This means that reuse is allowed, provided that appropriate credit is given and any changes are indicated”. For any use or reproduction of photos or other material that is not under the ENISA copyright, permission must be sought directly from the copyright holders. ISBN 978-92-9204-586-9, DOI: 10.2824/94949, Catalogue nr TP-04-22-095-EN-N

text: TABLE OF CONTENTS

text: EXECUTIVE SUMMARY 5 1. INTRODUCTION 7 2. THE DEMAND SIDE OF CYBER INSURANCE SECTOR 9

text: 2.1 RISK-MANAGEMENT PRACTICES 10

text: 2.2 CYBER INSURANCE AND OTHER COVERAGE 12

text: 2.3 IDENTIFICATION AND SELECTION OF CYBER INSURER 15

text: 2.4 CONTRACT AND PROCESS 19

text: 2.5 MAINTENANCE AND SUPPORT 21

text: 2.6 CLAIM PROCEDURE 22

text: 2.7 AWARENESS AND SKILLS 23

text: 3. RECOMMENDATIONS 27 4. ANNEXES 29

text: 4.1 ANNEX A. ABRREVIATIONS 29

text: 4.2 ANNEX B. BIBLIOGRAPHY 30

text: 4.3 ANNEX C. SURVEY QUESTIONS 32

text: 4.4 ANNEX D. SURVEY RESULTS 35

text: TABLE OF FIGURES

text: Figure 1: Formalised process to identify cyber-risk 10 Figure 2: Formalised process to identify cyber risk 11 Figure 3: Cyber insurance uptake in OESs 12 Figure 4: Insurance, other than standalone cyber policies 13 Figure 5: Reasons for not contracting cyber insurance 14 Figure 6: Main reason to purchase cyber insurance 14 Figure 7: Support during initial steps of cyber insurance 16 Figure 8: selection criteria for acquiring cyber insurance 17 Figure 9: Effort required during the assessment 18 Figure 10: Cyber insurance contracts according to organisational needs 20 Figure 11: Relevance of cyber insurance 21 Figure 12: Issuing a claim 22

text: EXECUTIVE SUMMARY

text: This report analyses current perspectives and challenges of Operator of Essential

text: Services (OESs) related to the acquirement of cyber insurance services. Information and statistics are presented according to the selection, acquisition and use of cyber insurance as a mitigation tool in the context of their daily business’ lifecycle. The collection of data and opinions were elaborated in relation to the category of OESs included in the network and information security (NIS) directive (

text: Directive (EU) 2016/1148

text: . Nonetheless, results and evidences would be also applicable to essential and important entities defined in the framework of the NIS2

text: Directive (EU) 2022/2555

text: The report addresses exclusively the ‘demand side’ of cyber-insurance market, applicable to the particular case of OESs. The analysis and results have been conducted from a methodological

text: approach which integrates: desk-research, on-line survey, phone interviews, data

text: analysis and recommendations for policymakers. To the purpose, the analysis aims at addressing different segments of the cyber insurance contracting process, namely: risk management practices, cyber insurance coverage, claims processes and opinions from the respondents in key areas such as skills.

text: In terms of results, the analysis shows that a big proportion of operators of essential services consider cyber insurance less attractive due to increasing prices and

text: decreasing coverage. This phenomenon is highly noted specially in small entities in a moment in which ransomware incidents are on the rise . Data from both the survey and the semistructured interviews support these findings. Other key findings of the analysis were:

text: • third-party liabilities are the preferred additional coverage that companies would like to have added in their cyber insurance coverage; • cyber-risk is being highly addressed on qualitative basis. For a 77 % of operators of essential services there is a formalized process to identify cyber-risk. On the other hand, 64 % of OESs do not quantify cyber-risks; • other risk mitigation strategies were often mentioned as more favourable than risk transfer due to coverage and costs.

text: Regarding recommendations, the report provides advice to policymakers in EU and its Member States and also to the community of OESs. The report focuses on the analysis of demand side of cyber insurance (particularly OESs), and accordingly related recommendations target policymakers and OESs. Accordingly, key recommendations for policy makers are:

text: • Implement guidance mechanisms to OESs focused on: identification of assets,

text: monitor key metrics, conduct periodic risk assessments, security controls

text: identification and quantification of risks. • Promote the creation of frameworks oriented to identify and exchange good practices among OESs, particularly those related to identification, mitigation and quantification of risk exposure. • Be aware of the heterogeneity of OESs in terms of size, economic sector and strategic function. Formulation of policy action should be coherent with specific needs and challenges of OESs without losing sight of differences among them, e.g. small entities vs large operators.

text: • Address the feasibility of more economically sustainable cyber-insurance policies by working closer to cyber-insurance brokers.

text: Similarly, key recommendations to OES are:

text: • Improve maturity of risk management practices, especially those related to identification, mitigation and quantification of risk exposure. • Consider to allocate or increase budgetary provisions to implementing

text: processes related to identification of assets, monitor key metrics, conduct

text: periodic risk assessments, security controls identification and quantification of risks based on industry best practices. • Improve knowledge transfer and sharing among OESs allowing to learn from good practices when contracting and implementing cyber insurance to the benefit of these operators.

text: 1. INTRODUCTION

text: Objective

text: The main objective of this analysis is to understand and identify current requirements and challenges faced by operators of essential services (OESs) when contracting cyber insurance. Accordingly, the aim of the analysis is to provide recommendations to policymakers and OES on possible ways to face these challenges. The work is particularly focused on the analysis of OESs as acquirers of cyber insurance products and services.

text: Scope

text: The conducted work aims at shedding light on potential barriers that are preventing OESs from purchasing cyber insurance. The report addresses exclusively the ‘demand side’ of cyberinsurance market, applicable to the particular case of OESs. Therefore, considerations and analysis related to the supply side of the cyber-insurance sector (e.g. insurers, brokers) are out of the scope of this analysis.

text: The study has focused on challenges faced by 262 OESs distributed in 25 EU Member States, representing all strategic sectors defined by

text: Directive (EU) 2016/1148

text: , known as the NIS directive. The final outcome of the analysis is reflected in the main part of this report. The comprehensive set of questions and answers addressed in the survey are included in the annexes.

text: Background

text: Prior to the analysis presented in this report, ENISA had conducted deep-dives analysis on specific aspects of cyber insurance from a policy development point of view. Key outputs of this previous work were:

text: a) Cyber insurance: recent advances, good practices and challenges ; b) Commonalities of risk assessment language in cyber insurance - recommendations on cyber insurance .

text: The results from these reports, released between 2016 and 2017, provided solid evidence of the existence of good practices in the areas of both cyber insurance and risk management and on the existence of challenges that are yet to be tackled and that require further investigation into their respective causes and consequences.

text: At interinstitutional level, ENISA has developed strong synergies with several stakeholders including the European Insurance and Occupational Pensions Authority (EIOPA) in actions oriented to have a better understanding of the sector of cyber insurance from a two-fold perspective: cybersecurity and market development. These synergies have been materialised on close coordination activities to monitor cyber insurance developments, knowledge exchange and multidisciplinary collaboration.

text: Methodological approach

text: The study was conducted based on the following steps:

text: Desktop research: Focused on gathering information helping to understand the state of the art of the market, the requirements and challenges faced by OESs and the experiences around the use of cyber insurance as mitigation tool in different contexts. The knowledge base allowed the formulation of preliminary hypotheses which were used as input to create the survey and the interview guide.

text: Online survey: Consisted of obtaining data related to challenges and requirements of OESs in acquiring cyber insurance. The survey covered over sixty questions distributed in seven thematic blocks including: (i) information about the respondent, (ii) risk identification, quantification and prioritization, (iii) identification and selection phase, (iv) contractual phase, (v) coverage maintenance and support, (vi) claim procedure and (vii) skills. For a complete overview of the survey please refer to Annex B.

text: Semi-structured interviews: A series of 10 interviews were conducted to investigate the background and motivation of answers in the survey. This activity provided additional insights into the experiences of OESs in finding acquiring and managing cyber insurance as a tool for cyber risk mitigation. The respondent consisted of a diverse group of OESs in terms of size, geography and sector represented.

text: Data analysis and validation: A final step in the approach was to conduct an analysis of the survey and interview data. Challenges, issues and key insights derived from both the interviews and through analysis of the dataset were captured in the report.

text: Policy recommendations: As a result of previous methodological steps, the analysis concludes with a list of recommendations addressed to policymakers. These recommendations are elaborated on the basis of evidences, findings and data gathered mostly in first half of 2022. To this end, interested parties should keep in mind the constant and rapid evolution of the cyber insurance market, and should therefore consider the time in which related analysis took place.

text: 2. THE DEMAND SIDE OF CYBER INSURANCE SECTOR

text: Based on the desk-research analysis , the following aspects provide a general overview of the cyber insurance sector. Existing literature has addressed cyber insurance from several angles, mostly from the perspective of the cyber insurance offer-side of the market, such as insurers or brokers.

text: • Cyber insurance is still in a development phase and it is challenging to capture how expectations on coverage may change over time and how emerging threats may change the expectations regarding coverage. • The cyber insurance industry may expect a gradual increase in the demand for cyber insurance and the importance of cyber coverage is expected to increase significantly • The cyber insurance processes follow three main pillars: risk identification, risk analysis and establishing a contract. • The overall awareness and perceived probability of the cyber risks is high but expected impacts of a cyber-attack may yet be underestimated. • Lack of incident-related data is a primary obstacle to a detailed understanding of fundamental aspects of cyber risk and to the provision of proper coverage to end users. • Insurers may face challenges in collecting accurate information from end-users as they may be reluctant to provide complete answers in questionnaires or to provide access to information related to critical assets, internal procedures and security controls. • End-users may be concerned about possible non-disclosure or incomplete information leading to claims being rejected. As a result, it is hard to determine how much risk to transfer and insurers may also face risks they may not have properly quantified. • The lack of credible data and the potential for high aggregate losses may lead to cyber insurance policies with gaps in coverages and limits that are too low, which may lead to a lack of indemnification for cyber losses. • Systems change continuously as new systems are added and obsolete ones are dismantled, leading to a continuous change of the risk profile. • Statistics on cyber incidents are not completely reliable as victims do not always report incidents (e.g. to avoid reputational damage) • It can take a very long time before a breach is noticed and depending on the policy conditions, such an event may be no longer covered. • Guidelines for cyber insurance are available and can provide an initial framework for end-users to approach the selection and use of cyber insurance in their respective contexts .

text: In contrast, the desk research activity did not contribute to obtain data and information related to the demand side in cyber insurance market dynamics. Accordingly, the work presented in this report aims at analysing cyber insurance challenges and perspectives, targeting the particular group of entities called: operators of essential services (OESs), as defined in the NIS Directive. The following sections discuss in detail related analysis and obtained results. The sections are a reflect of typical cyber insurance lifecycle that includes: risk management practices (section 2.1), coverage (2.2), identification and selection of insurer (2.3), contracts (2.4), maintenance (2.5), claim procedures (2.6) and awareness and skills (2.7)

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU 2.1 RISK-MANAGEMENT PRACTICES

text: Cyber insurance is a strategy to reduce risk and therefore is addressed in a context of risk management processes within an organisation. The risk management processes can also be a pre-requisite for cyber insurance. As risk transfer is preceded by the identification and quantification of risk exposure, it can be one option in a range of other risk management strategies (acceptance, termination of activities or risk mitigation through process controls). Therefore, respondents were asked about risk management processes, risk mitigation options and the quantification of cyber risks.

text: Of all the respondents, over 77 % indicated that they follow a formalised process to identify cyber risks. In contrast, the analysis also shows that 23 % are not using a formalised process or are unsure that there is one. This gap expands when respondents were queried regarding existing processes to make decisions on risk mitigation tools and controls. In 32 % of the cases, a process to determine risk mitigation tools and controls is not in place.

text: Figure 1: Formalised process to identify cyber-risk

text: This observation becomes even clearer when analysing the data on risk quantification. The results also demonstrate that only 32 % of respondents quantify cyber risk. The difference between these numbers could be explained by respondents only applying a qualitative risk assessment process (for the 67 % that have a formalised process to identify cyber risk). Respondents who have cyber insurance are more likely to quantify cyber risk as well. The research shows that 61 % of respondents with cyber insurance do, compared to the 22 % of respondents who do not have cyber insurance.

text: Figure 2: Formalised process to identify cyber risk

text: As risk quantification is a pre-requisite for risk transfer, the relative lack of risk quantification practices among OESs can be seen as an emergent challenge in the preliminary steps oriented to acquiring cyber insurance services. During the interviews, some respondents indicated that the risk quantification process was conducted by their insurance broker or agent.

text: All interviewed contributors indicated to have risk-management practices in place and a process to determine controls. Most of respondents did not quantify cyber risks themselves but worked with their broker or insurance company to quantify their exposure and determine coverage needs. In some cases, the coverage chosen was also a trade-off between coverage and costs, to keep the annual cyber insurance policy fee within the allowed budget.

text: Summing up, it can be stated that for a subset of OESs, the maturity of the risk-management processes can be improved. The obtained data suggests that as risk-management maturity improves, the coverage of cyber insurance will also increase. Other key findings of risk management practices in OESs are:

text: • Most respondents (77 %) follow a formalized process for qualitative risks assessments (N = 202). Additionally, 68 % follows a process for the selection of controls to mitigate risk (N = 177). • Among all respondents, only 32 % (N = 84) quantifies cyber risk (N = 167 does not). • Within respondents who already have cyber insurance, 22 % of them quantify cyber risk

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU 2.2 CYBER INSURANCE AND OTHER COVERAGE

text: A key aspect of the research was to understand the cyber coverage of OESs. In addition, coverage through other existing policies was investigated as well as the type of coverage, missing elements and failed attempts to get cyber insurance in the past. The motivations behind contracting cyber insurance and the major challenges were also analysed.

text: Current cyber coverage

text: The survey revealed that only 26 % of the respondents currently have cyber insurance and 74% do not. This indicates a slightly lower coverage than the NIS investment results of 2022, which report that 32 % of OESs/DSPs have cyber insurance (or the 30 % of OESs/DSPs with cyber insurance in 2021 ). Although the reported coverage percentages from this cyber insurance survey are slightly lower than in NIS investment reports, it does show a declining trend over the last few years.

text: Figure 3: Cyber insurance uptake in OESs

text: From a territorial point of view, regional differences in cyber coverage appear. In western and northern Europe the cyber coverage appears to be the highest (45 %), followed by southern Europe (39 %) and lastly eastern Europe, with the lowest adoption of cyber insurance (12 %).

text: Table 1: Cyber insurance uptake across the EU

text: Other insurance coverage including cyber

text: In addition to specific cyber policies, other insurance policies might sometimes provide coverage for cyber incidents. This could be explicitly through a cyber add-on or more implicitly by not excluding any cyber incidents. Over half of the respondents indicated that they do not have this coverage, but 26 % (N = 64) indicated that they have some form of cyber coverage through their other policies.

text: Figure 4: Insurance, other than standalone cyber policies

text: What cyber insurance policies cover

text: The coverage of cyber insurance is quite broad and includes various damages and incidents. Coverage ranges from (Distributed) denial of service (DDoS) attacks, malware, ransomware attacks, stolen credentials (unauthorised access and use of data assets and computer systems), phishing attacks, network interruption and more.

text: However, respondents to the interview expressed concern about the ease of renewing the policies and exclusions, limitations, and price of the prolongations. In particular, getting coverage for ransomware has become increasingly difficult in the last few years according to respondents.

text: Not able to get cyber insurance

text: The survey revealed also that companies have difficulties in getting cyber insurance mainly for three reasons:

text: • Coverage is not sufficient for their needs. • Because of the way insurers assess the organisation. • The price of the insurance policy or offer generally does not meet the expectations.

text: Figure 5: Reasons for not contracting cyber insurance

text: Reasons to purchase cyber insurance and preferred coverage

text: Coverage in case of incident is, for almost half of respondents, the driving reason to purchase cyber insurance. Requirements by law (19 %), pre-incident (11 %) and post-incident (11 %) coverage were in less degree important reasons. Respondents who did not have insurance indicated to be interested in various types of coverage including: business continuity, expert support during an incident and ransomware coverage.

text: Figure 6: Main reason to purchase cyber insurance

text: One of the respondents, a large OESs from western Europe, revealed that the organisation had decided against a cyber insurance policy due to costs and limitations in available coverage. The key decision in this case was to invest the budget in the Chief Information Security Officer (CISO) function instead, as this was seen as more effective.

text: Key findings

text: • For 26 % of respondents, other insurance policies would provide some cover in case of a cyber incident (N = 64). 53 % of respondents do not have this coverage (N = 131), other 22 % do not know (N = 54). • Only 26 % of OESs has a cyber policy (N = 67), 74 % of the respondents does not have cyber insurance (N = 195). • Third party liability coverage is the preferred additional coverage by the respondents (e.g. coverage of incidents at a supplier which would interrupt business for the insured). • Regional differences show that western and northern Europe have the highest coverage (45 %), followed by Southern Europe (39 %). Eastern Europe has the lowest coverage with 12 %. • Of all respondents 36% (N = 95) have not evaluated a cyber insurance offer before, against 38 % (N = 100) who have and 20 % who expects this in the future. • Both market research and the interviews indicate cyber insurance policies are increasing in price and decrease in coverage. • OESs increasingly looking at alternative risk mitigating strategies (e.g. risk treatment/risk reduction). • 56 % of respondents stated they consider other risk mitigations tools to be more effective compared to cyber insurance (N = 147). • Some respondents indicated to consider discontinuing current cyber insurance if pricing keeps on increasing. • Combined data from this study and previous NIS Investment data shows a declining cyber insurance coverage trend.

text: 2.3 IDENTIFICATION AND SELECTION OF CYBER INSURER

text: This section describes aspects related to the identification and selection phase of a cyber insurer as part of a cyber insurance contracting process. Similarly, the section addresses the perception of OESs to the acceptance by the insurance company.

text: Orientation, identification, and selection

text: The data shows that 26 % of the respondents (N = 67) currently have cyber insurance and 74 % do not. However, 37 % of the respondents (N = 97) confirms that they have identified cyber insurance as a risk mitigation tool and 20 % states that they are considering acquiring it within one year (N = 28) or after two years (N = 25).

text: It is important to highlight that 56 % of the respondents (N = 157) reports that ‘other risk mitigation tools were considered more adequate’. This topic has been discussed in detail with the OESs during the interviews and the reason for this response it is often linked to the high

text: prices of available coverages. This trend explains why other mitigation strategies (like investment in cyber controls) are becoming a more feasible investment for some OESs.

text: Figure 7: Support during initial steps of cyber insurance

text: With reference to the selection process, most of the OESs that have insurance have pointed out that they rely on the insurance broker or on the insurance company to identify the right cyber insurance. In contrast, when asking the same question to OESs that have not yet acquired cyber insurance (out of 169 respondents), 57 % would rely on the insurance broker or on the insurance company and 24 % would rely on the regulator / public body.

text: Still on the selection process, out of 232 respondents, 54 % confirms knowing about cyber insurance offers through own research, 27 % have been contacted by an agent or a broker and 10 % have relied on other resources (e.g., information from other internal organisation departments, parent companies, shareholders). Finally, only 13 out of 232 OESs declare that they have acquired knowledge about cyber insurance offers through interactions with other OESs.

text: When asked about the selection criteria for acquiring cyber insurance, 174 respondents have provided the answers as shown in Figure 8.

text: Figure 8: Selection criteria for acquiring cyber insurance

text: It can be noted that ‘price’ appears on its own or in combination with other criteria in every possible combination. Therefore, price emerges as the most important criterion for acquiring cyber insurance. Immediately after the price, other criteria conditioning cyber insurance acquisition are:

text: • reputation of the insurance company, • coverage, • specific clauses, • support.

text: Finally, out of 64 OESs entities that have cyber insurance, only 16 % of them declare that they are not satisfied with their insurance regarding their risk exposure, while the rest of them declare that they are satisfied (69 %) or very satisfied (16 %).

text: Many of the respondents indicated they worked with their broker to identify cyber insurance options. One respondent with a sizable insurance team indicated that the initiative came from their insurance responsible – later supported by the insurance broker.

text: Assessment and acceptance by the insurance company

text: On the matter of the intake assessment, the OESs have been asked to provide an answer based on the elements that apply to the procedure they have undergone. Their answers are shown in Table 2.

text: Table 2: Intake assessment conducted by insurers

text: It can be noted that most of the assessments relied on questionnaires, interviews and requests for documentation. Also, third-party assessments are among the assessments’ methods, but they don’t happen very often.

text: On the duration of the assessment, only 18 out of 61 respondents have reported that they consider it too long, while the vast majority (70 %) answered that the length of the assessment was ‘about right’ (N = 39) or ‘short’ (N = 4). In respect of the effort required during the assessment, 60 OESs have replied as follows:

text: Figure 9: Effort required during the assessment

text: Finally, on the matter of legal limitations (e.g. classified or internal documentation) potentially encountered during the assessment phase, the respondents reported that they had no limitations and, if existing, they could be adjusted to allow information sharing. Only one respondent out of 60 reported that these legal limitations couldn’t be adjusted. It has to be noted that in 7 % of the cases (N = 4), legal limitations led to a rejection or modification of the offer by the insurer.

text: On the interviews several respondents indicated that time and effort to renew insurance was getting longer and more effort-intensive, especially in the last couple of years.

text: Key findings

text: • One in four OESs currently have cyber insurance in place. Moreover, 37 % of the respondents (N = 97) confirms that they have identified cyber insurance as a risk mitigation tool and 20 % state that they are considering acquiring cyber insurance within one year (N=28) or after two years (N = 25). • Half of OESs confirms knowing about cyber insurance offers through own research, 27 % have been contacted by an agent or a broker and 10% have relied on other resources. Only 13 of OES declare that they have acquired knowledge about cyber insurance offers through interactions with other OESs. • Within the criteria for acquiring cyber insurance, price appears to be the most important, followed by: reputation of the insurance company, coverage, specific clauses and support. • Legal limitations at the time of sharing information with the broker do not normally trigger a problem. Yet, in 7 % of the cases, legal limitations led to a rejection or modification of the offer by the insurer.

text: 2.4 CONTRACT AND PROCESS

text: For 13 % of respondents, Chief Information Security Officer (CISO) or security team is responsible for procuring cyber insurance. The respondents who have cyber insurance are slightly more likely to have a dedicated insurance team involved in the procurement of cyber insurance. As shown in Table 3, in most of cases decision making regarding acquisition of insurance takes place outside the CISO function. Decisions regarding cyber insurance are more often taken by executives, a dedicated insurance team or the finance function.

text: Table 3: Responsible for cyber insurance in OESs

text: For 39 % of the overall experiences show that the contract was not negotiable and based on standard templates, while most of the experiences show that the contract could be at least partially negotiable if not completely negotiable.

text: Figure 10: Cyber insurance contracts according to organisational needs

text: The data regarding the existence of certifications (e.g. ISO 27001) and their impact on the contractual agreement show that in 77 % of the cases this element led to the easing of the acceptance by the insurance company. Out of 40 OESs, 5 reported that the existence of certifications led to the reduction of the price and 4 declared that owning these features had an impact on the coverage limits. Still on the matter of coverage, only 7 OESs out of 58 reported that the assessment conducted by the insurer led to exclusions and sub-limits, while 44 % responded that no limitations were introduced.

text: With reference to the information received when purchasing cyber insurance, out of 60 respondents, 57 % reported that they have received clear information about any embedded exclusions and limitations of the coverage, including the cases of systemic events.

text: At the same time, only 32% of the OESs (N = 19) have confirmed that they have been presented with a list of examples of events that are excluded from the coverage. It should be noted that in the same two questions, almost one third of the participants replied that they do not know whether they have received clear information and a list of exclusions.

text: An insurance manager expressed his concerns about how to interpret certain clauses of the cyber insurance contract. He mentioned the lack of standardisation in the clauses and the lack of available precedents to understand how clauses would be explained in a loss scenario.

text: Key findings

text: • Decision making regarding acquisition of insurance, in most of cases, takes place outside the CISO function (only in 12 % of OESs). • Only 3 % of OESs (2 out of 62) stated the contract and its annexes to be unclear. • Of respondents with cyber insurance, 63 % of respondents found the contract clauses clear or somewhat clear.

text: • On the negotiability of the contract, 61 % was partially or completely negotiable (N = 61). • A 57 % of OESs reported to have received clear information about any embedded exclusions and limitations of the cyber insurance coverage, including the cases of a systemic events.

text: 2.5 MAINTENANCE AND SUPPORT

text: When exploring the area regarding additional features or services embedded in the cybersecurity insurance acquired by the OESs, it can be noted that:

text: • 40 % of respondents (24 out of 60) declared that their insurance company provide support in prevention of cyber incidents; • 68 % of respondents (40 out of 59) declared that their insurance company provide post-incident cyber support.

text: The question related to importance of ‘prevention support’ services has also been asked to the participants. Cyber insurance support appears to be not relevant for 18 % of OESs and relevant for the 32 %. Only 20 % of OESs consider it as extremely necessary.

text: Figure 11: Relevance of cyber insurance

text: In contrast, the insured OESs have been asked if a cyber incident has led to an increase of costs or denial of coverage. In this case only 10 % of the respondents has confirmed this possibility, while 50 % has declared that they haven’t observed any incident. The rest of the respondents were equally divided between ‘no’ and ‘does not know’.

text: A few respondents mentioned cyber-incident response to be a very valuable service. However, in many cases an existing relationship with a cyber-incident response party is already in place, making the insurance company a less likely candidate to offer this service.

text: Key findings:

text: • For OESs, post-incident response services provided by cyber insurers are more prominent that pre-incident response services. • For 20 % of non-insured OESs, maintenance and support from a cyber insurer provider would be extremely necessary. • Half of insured OESs have not witnessed any cyber-incident, therefore they cannot assess how the increase of cyber insurance costs could be related

text: 2.6 CLAIM PROCEDURE

text: The final section of the survey, dedicated to the gathering of data about the experiences of OESs that have acquired cyber insurance, has been focused on the ‘claim procedure’.

text: To the question: has your organisation issued a claim with a cyber insurer? Almost 3 in four OESs (44 out of 60), have never issued a claim. Likewise, 13 % of the respondents (8 out of 60) have issued a claim and 13 % do not know.

text: Figure 12: Issuing a claim

text: Operators of essential services were also asked if they have ever issued a cyber claim with their insurer on a non-cyber policy. In this case 7 out of 8 responded that they have never done it, 1 did not know.

text: Determining the claim and proving all supporting evidence can be quite a complex step in the process. A respondent indicated that they hired a claims adjustment consultant due to the complexity of the case.

text: Key findings

text: • 13 % of the respondents (8 out of 60) have issued a claim with their cyber insurer. • Of the 8 respondents, 6 confirmed their claim was approved and 2 confirmed that the reimbursement was enough to cover the actual damage. • 3 out of 6 respondents also confirmed that the claim was processed in a timely manner (only 2 responded that it was not). • On the clarity of the methodology for calculating the amount of the claim, 3 out of 6 confirmed that the methodology was clear (only 2 responded that it was not). • Out of the 6 respondents, 5 reported that the claim did not lead to any legal dispute with the insurer, 1 did not know.

text: 2.7 AWARENESS AND SKILLS

text: To increase awareness about cyber insurance, the top responses (in order of priority) were communication and dissemination, better coverage, ad-hoc collaborative networks and peerlearning. Interestingly, better coverage was mentioned, which could indicate that cyber insurance is perceived as a mitigation strategy with limited scope for the risk itself. Some respondents mentioned that they do not regard cyber insurance as a viable risk mitigation strategy at all. Informal learning and recommendations were suggested as a good way to improve strategy. Options mentioned less often were public support and research and scientific evidence.

text: To increase the purchase of cyber insurance, the top responses (in order of priority) were:

text: • better coverages, • less exclusions, • clearer policy wording, • communication and dissemination.

text: These responses would be understood in line with higher expectations from organisations according to the offered cyber insurance services. This finding is coherent with outcomes of interviews where interviewees expressed their decreasing appetite for cyber insurance as a strategy to reduce risk.

text: In the interviews, interviewees expressed that cyber insurance policy fees have gone up significantly in recent years, while at the same time the policy terms have become less attractive (exclusions, sub-limits, etc.). The decreasing attractiveness of cyber insurance due to price and coverage was a recurring theme during the interviews. Investments in cyber controls (risk treatment instead of transfer) were generally seen as more effective in mitigating cyber risk.

text: Lastly, respondents were asked to indicate the relevant skills they believed to be necessary when purchasing cyber insurance. The top skills mentioned (in order) were risk assessment skills, knowledge about legislation, information management and functioning of the insurance market. As risk-management skills were indicated as the primary skill, it is notable to mention the maturity gap described in section 2.1 on risk-management practices.

text: Several respondents indicated that it was unclear how premiums are being calculated. They asked for more transparency – so as to be able to see the risk models - so to be able to make a better weighted decision on the level of coverage to buy. One respondent also

text: argued that it was unclear how investment in cyber controls would contribute to lower premiums (creating a better foundation for a business case).

text: Key findings

text: • Communication and dissemination, better coverage, ad-hoc collaborative networks and peer-learning are prominent areas to raise awareness on cyber insurance relevance. • In the opinion of OESs, key aspects oriented to increase purchase of cyber insurance are: better coverages, less exclusions, clearer policy wording, communication and dissemination. • From an awareness perspective, most of interviewees realised how cyber insurance policy fees have gone up significantly in recent years, while policy terms have become less attractive. • In terms of skills, the top ones mentioned as relevant for cyber insurance sector are: risk assessment, knowledge about legislation, information management and functioning of the insurance market.

text: Table 4: Summary of key findings

text: Risk management practices Coverage Identification and selection of cyber insurer

text: For 26 % of respondents, other insurance policies would provide some cover in case of a cyber incident (N = 64). 53 % of respondents do not have this coverage (N = One in four OESs currently have cyber 131), other 22 % do not know (N = 54). insurance in place. Moreover, 37 % of the respondents (N = 97) confirms that they have Only 26 % of OESs has a cyber policy (N = 67), 74 % of the respondents does not identified cyber insurance as a risk mitigation have cyber insurance (N = 195). tool and 20 % state that they are considering acquiring cyber insurance within one year (N = Most respondents (77 %) follow Third-party liability coverage is the preferred additional coverage by the respondents 28) or after two years (N = 25). a formalized process for (e.g. coverage of incidents at a supplier which would interrupt business for the qualitative risks assessments (N insured). Half of OESs confirms knowing about cyber = 202). Additionally, 68 % insurance offers through own research, 27 % Regional differences show that western and northern Europe have the highest follows a process for the have been contacted by an agent or a broker coverage (45 %), followed by southern Europe (39 %). Eastern Europe has the selection of controls to mitigate and 10 % have relied on other resources. Only lowest coverage with 12 %. risk (N = 177). 13 of OESs declare that they have acquired knowledge about cyber insurance offers Of all respondents 36 % (N = 95) have not evaluated a cyber insurance offer before, Among all respondents, only 32 through interactions with other OESs. against 38 % (N = 100) who have and 20 % who expects this in the future. % (N = 84) quantifies cyber risk (N = 167 does not). Within the criteria for acquiring cyber Both market research and the interviews indicate cyber insurance policies are insurance, price appears to be the most increasing in price and decrease in coverage. Within respondents who already important, followed by: reputation of the have cyber insurance, 22 % of OESs increasingly looking at alternative risk mitigating strategies (e.g. risk insurance company, coverage, specific them quantify cyber risk treatment/risk reduction). clauses and support.

text: 56 % of respondents stated they consider other risk mitigations tools to be more Legal limitations at the time of sharing effective compared to cyber insurance (N = 147). information with the broker do not normally trigger a problem. Yet, in 7 % of the cases, Some respondents indicated to consider discontinuing current cyber insurance if legal limitations led to a rejection or pricing keeps on increasing. modification of the offer by the insurer.

text: Combined data from this study and previous NIS Investment data shows a declining cyber insurance coverage trend.

text: Contracts and process Maintenance and support Claim procedures Awareness and skills

text: Communication and dissemination, better Decision making regarding acquisition of 13 % of the respondents (8 out of 60) have coverage, ad-hoc collaborative networks and insurance, in most of cases, takes place For OESs, post-incident issued a claim with their cyber insurer; peer-learning are prominent areas to raise outside the CISO function (only in 12 % response services provided by awareness on cyber insurance relevance. of OESs). cyber insurers are more Of the 8 respondents, 6 confirmed their

text: prominent that pre-incident claim was approved and 2 confirmed that In the opinion of OESs, key aspects oriented Only 3 % of OESs (2 out of 62) stated the response services. the reimbursement was enough for to increase purchase of cyber insurance are: contract and its annexes to be unclear. covering the actual damage; better coverages, less exclusions, clearer

text: For 20 % of non-insured policy wording, communication and Of respondents with cyber insurance, 63 OESs, maintenance and 3 out of 6 respondents also confirmed that dissemination. % of respondents found the contract support from a cyber insurer the claim was processed in a timely clauses clear or somewhat clear. provider would be extremely manner (only 2 responded that it was not) From an awareness perspective, most of

text: necessary. interviewees realised how cyber insurance On the negotiability of the contract, 61 % On the clarity of the methodology for policy fees have gone up significantly in was partially or completely negotiable (N Half of insured OESs have not calculating the amount of the claim, 3 out recent years, while policy terms have become = 61). witnessed any cyber-incident, of 6 confirmed that the methodology was less attractive.

text: A 57 % of OESs reported to have therefore they cannot assess clear (only 2 responded that it was not);

text: how the increase of cyber In terms of skills, the top ones mentioned as received clear information about any insurance costs could be Out of the 6 respondents, 5 reported that relevant for cyber insurance sector are: risk embedded exclusions and limitations of the claim did not lead to any legal dispute assessment, knowledge about legislation, the cyber insurance coverage, including related with the insurer, 1 did not know. information management and functioning of the cases of a systemic events. the insurance market.

text: 3. RECOMMENDATIONS

text: The following recommendations are provided aiming to mitigate challenges faced by OESs when addressing cyber security. The following set of recommendations are addressed primarily to policymakers and OESs in the EU and its Member States, dealing cyber insurance policy.

text: Recommendations to policymakers

text: • Implement guidance mechanisms aiming at improving maturity of risk management practices of OESs. Specific areas where guidance would be more helpful are: identification of assets, monitoring key metrics, frameworks for risk assessment and quantification, security controls identification and quantification of risks.

text: • Promote the creation of frameworks oriented to identify and exchange good practices among OESs, particularly those related to identification, mitigation and quantification of risk exposure. Also, facilitate exchange of experiences among OESs related to contracting and implementing cyber insurance in different contexts.

text: • Be aware of the heterogeneity of OESs in terms of size, economic sector and strategic function. Formulation of policy action should be coherent with specific needs and challenges of OESs as a whole, without losing sight of differences among them, e.g., small entities vs large operators.

text: • The study shows that OESs tend to prefer self-investment to risk transfer if prices of cyber insurance are high. Policymakers should address the feasibility of more economically sustainable cyber insurance policies by working closer to brokers.

text: • Address the link between the cyber-insurance and cyber security by making sure that procurement of products, services and processes certified in the European Union – or that have obtained a label associated with those schemes - obtain a higher score in the intake assessment performed by the insurance companies.

text: • Foster initiatives, including standardization and guidance development, to provide elements and assessment methodologies on the quantification of cyber risks, circumstance that would also improve the awareness and decision-making on specific areas in which cyber insurance would be the optimal mitigation tool.

text: • Steer multi-stakeholder dialogues oriented to improving clarity, understandability and comparability of policies by fostering the development of terminology of reference (taxonomy) for cyber insurance.

text: • Develop collaborative frameworks with public and private partners to enable skills frameworks and programmes for cyber insurance, particularly in areas such as risk assessment, legal aspects, information management and cyber insurance market dynamics.

text: Recommendations to OESs

text: • Improve maturity of risk management practices. The risk management practices related to identification, mitigation and quantification of risk exposure would contribute to clarify cyber insurance needs.

text: • Consider to allocate or increase budgetary provisions to implementing processes related to identification of assets, monitor key metrics, conduct periodic risk assessments, security controls identification and quantification of risks based on industry best practices.

text: • Improve knowledge transfer and sharing with other OESs allowing to learn from other good practices when contracting and implementing cyber insurance to the benefit of these operators. Also improve incident data sharing among sectors.

text: • Improve coverage all over digital supply chains, specifically covering 3rd party liability managed service providers. As supply chain are digitally connected, coverage for only a participant in the entire chain might not reduce risks sufficiently.

text: 4. ANNEXES

text: 4.1 ANNEX A. ABBREVIATIONS

text: CISO Chief Information Security Officer CFO Chief Financial Officer DSP Digital Service Provider EC European Commission EIOPA European Insurance and Occupational Pensions Authority EU European Union ISO International Standardization Organisation MS Member State (of the European Union) NIS Network and Information Security (Directive) N Number of operators of essential services who responded to questions in the survey OES Operator of Essential Service

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU 4.2 ANNEX B. BIBLIOGRAPHY

text: 1. Cebula, J. J., Popeck, M. E. and Young, L. R., A Taxonomy of Operational Cyber Security Risks Version 2, Carnegie Mellon University, May 2014, https://resources.sei.cmu.edu/asset_files/TechnicalNote/2014_004_001_91026.pdf

text: 2. Chondrogiannis, N., Farao, A. and Bountakas, P., ‘Security Economics service platform for smart security investments and cyber insurance pricing in the beyond 2020 networking era’, 16 March 2021, https://secondo-h2020.eu/wpcontent/uploads/2021/04/D5.1_Cyber_Insurance_Market_Attributes_and_Sources.pdf

text: 3. CRO Forum, ‘Cyber resilience – The cyber risk challenge and the role of insurance’, December 2014 https://www.thecroforum.org/wp-content/uploads/2015/01/Cyber-Risk- Paper-version-24-1.pdf

text: 4. CRO Forum, Emerging Risks Initiative – Major trends and emerging risk radar – 2021 update, 2021, https://www.thecroforum.org/wp-content/uploads/2021/06/ERI-Risk-Radar- 2021.pdf

text: 5. Cyber Innovative Technologies, ‘Cyber insurance limits case study’, https://cyberinnovativetech.com/wp-content/uploads/2020/03/Cyber-Insurance-Limits- Case-Study.pdf

text: 6. Cyber underwriting small group, Cyber Risk Underwriting – Identified challenges and supervisory considerations for sustainable market development, International Association of Insurance Supervisors, December 2020

text: 7. CyberArk, Contain cyber insurance costs and accelerate readiness with CyberArk SaaS Identity Security solutions, https://www.cyberark.com/resources/white-papers/containcyber-insurance-costs-and-accelerate-readiness-with-cyberark-saas-identity-securitysolutions

text: 8. De Smidt, G. and Botzen, W., ‘Perceptions of corporate cyber risks and insurance decision-making’, The Geneva Papers on Risk and Insurance – Issues and Practice, Vol 43, 2018, pp. 239–274

text: 9. European Insurance and Occupational Pensions Authority, ‘EIOPA Cyber Insurance Workshop’, 1 April 2019

text: 10. European Insurance and Occupational Pensions Authority, Cyber Risk for Insurers – Challenges and opportunities, Publications Office of the European Union, Luxembourg, 2019 https://www.eiopa.europa.eu/document-library/report/cyber-risk-insurers-challengesand-opportunities_en

text: 11. European Insurance and Occupational Pensions Authority, EIOPA Strategy on Cyber Underwriting, 2020, https://www.eiopa.europa.eu/document-library/strategy/cyberunderwriting-strategy_en

text: 12. European Insurance and Occupational Pensions Authority, Understanding Cyber Insurance – A structured dialogue with insurance companies, Publications Office of the European Union, Luxembourg, 2019, https://www.eiopa.europa.eu/sites/default/files/publications/reports/eiopa_understanding_c yber_insurance.pdf

text: 13. Farley, J., Cyber Market Conditions, Gallagher, January 2022 https://www.ajg.com/us/news-and-insights/2022/jan/2022-cyber-insurance-market-report/

text: 14. Franke, U. and Meland, P. H., ‘Demand side expectations of cyber-insurance’, 2019 International Conference on Cyber Situational Awareness, Data Analytics And

text: Assessment (Cyber SA), June 2019, https://www.researchgate.net/publication/337504102_Demand_side_expectations_of_cyb er_insurance https://link.springer.com/article/10.1057/s41288-018-0082-7 https://www.eiopa.europa.eu/media/event/eiopa-cyber-insurance-workshop https://www.iaisweb.org/uploads/2022/01/201229-Cyber-Risk-Underwriting_-Identified- Challenges-and-Supervisory-Considerations-for-Sustainable-Market-Development.pdf

text: 15. Insurance Europe, ‘Examples of cyber-resilience initiatives by national insurance associations’, October 2019 https://www.insuranceeurope.eu/publications/2295/examplesof-cyber-resilience-initiatives-by-national-insuranceassociations/download/National+examples %20A5.pdf

text: 16. Insurance Europe, ‘Response to FSB consultation on effective practices for cyber incident response and recovery’, 17 July 2020 https://www.insuranceeurope.eu/mediaitem/3ae6ae30-2c79-43c2-b44d- 5197419989ed/Response %20to %20FSB %20consultation %20on %20effective %20pra ctises %20for %20cyber %20incident %20response %20and %20recovery.pdf

text: 17. International Organisation for Standardization, Information Security Management – Guidelines for cyber insurance, ISO/IEC 27102:2019, August 2018, https://www.iso.org/standard/72436.html

text: 18. International Telecommunication Union (ITU), telecommunication standardization sector of ITU, Cyber insurance acquisition guidelines, August 2021, https://www.itu.int/rec/dologin_pub.asp?lang=e&id=T-REC-X.1061-202108-I!!PDF- E&type=items

text: 19. Johansmeyer, T., ‘The cyber insurance market needs more money’, Harvard Business Review, Harvard Business Publishing, 10 March 2022, https://hbr.org/2022/03/the-cyberinsurance-market-needs-more-money

text: 20. Marsh, ‘Cyber insurance market overview: Fourth quarter 2021’, 12 July 2021, https://www.marsh.com/us/services/cyber-risk/insights/cyber-insurance-market-overviewq4-2021.html

text: 21. Organisation for Economic Co-operation and Development, Enhancing the Availability of Data for Cyber Insurance Underwriting – The role of public policy and regulation, 2020, https://www.oecd.org/finance/insurance/Enhancing-the-Availability-of-Data-for-Cyber- Insurance-Underwriting.pdf

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU 4.3 ANNEX C. SURVEY QUESTIONS

text: Section I. Information about the respondent

text: 1. What is the name of your organisation? 2. Where is your organisation located? 3. What sector is your organisation active in? 4. Is your organisation officially designated as operator of essential services (OES) according to the NIS

text: Directive (EU) 2016/1148

text: ? (answer to this question will be used for statistical purposes only and won't be disclosed) 5. What is the size of your organisation by number of employees? 6. If insurance coverage is identified as a mitigation measure, who is responsible for procuring cyber insurance in your organisation? Section II. Risk identification, quantification, prioritisation

text: 7. Does your organisation follow a formalised process to identify cyber-risk? 8. Does your organisation follow a formalised process to decide which tools should be used to mitigate cyber-risk? 9. Does your organisation quantify cyber risks (in EUR)? Section III. Identification and selection phase Orientation, identification, and selection Assessment and acceptance by the insurance company

text: 18. How did the insurance company conduct the intake assessment? (Please select what applies) 19. How would you rate the duration of the assessment by the insurer? 20. How would you rate the effort required during the assessment by the insurer? 21. Has your organisation encountered any legal limitation (e.g. classified or internal documentation) in sharing information with the insurer during the assessment phase?

text: 22. Did legal limitations (e.g. classified or internal documentation) in sharing information with the insurer lead to a rejection or modification of the offer by the insurer?

text: Current situation and coverage

text: 23. Does your organisation have ‘insurance’ (other than standalone cyber policies or policies with a cyber add-on in place), that might cover damages from a cyber incident, (i.e. by not explicitly excluding cyber events, for example)

text: 24. If you have cyber insurance, what does it cover?

text: 25. If you have cyber insurance, is there any additional risk you would like to cover which is not included in your current policy?

text: 26. Did you try to get insurance and did not manage? If yes, please indicate the main reason

text: 27. If your organisation does not have cyber insurance, what would you consider getting insurance coverage for?

text: 28. What is the main reason for your organisation to purchase cyber insurance?

text: 29. What do you see as a major challenge in your cyber insurance policy? Section IV. Contractual phase

text: 30. Are the contract and its annexes well written and easy to understand?

text: 31. To what extent was the contract tailored to your organisation?

text: 32. Did the existence of certifications (e.g., ISO 27001) have an impact on the contractual agreement?

text: 33. Did the assessment conducted by the insurer result in any exclusions or sub-limits?

text: 34. When purchasing cyber insurance were you clearly informed about any embedded exclusions and the limitations of the coverage, including for risks arising from a systemic event?

text: 35. When purchasing cyber insurance were you presented with a list of examples of events that are excluded from the coverage? Section V. Coverage maintenance and support Pre-incident support

text: 36. Did your insurance company provide support in the prevention of cyber incidents?

text: 37. If you have not yet acquired yet cyber insurance, how relevant would this support be for you? Post-incident support

text: 38. Does your cyber insurance company provide incident support? Maintenance

text: 39. Has a cyber incident led to an increase of costs or denial of coverage? Claim procedure

text: 40. Has your organisation issued a claim with a cyber insurer?

text: 41. Was the claim approved?

text: 42. Was the reimbursement enough to cover the actual costs of the damage?

text: 43. Was the claim processed in a timely manner according to contract?

text: 44. Was the methodology to calculate the amount of claim clear?

text: 45. Was the claim followed by a legal dispute because of a disagreement with the insurer?

text: 46. Have you issued a claim with your general insurer due to damages resulting from a cyber incident not covered by cyber standalone policies or policies with cyber add-ons?

text: 47. Was your claim approved? (Following previous question)

text: Closing questions

text: 48. In your opinion what type of actions would lead to increased awareness of cyber insurance as a risk mitigation in OESs?

text: 49. In your opinion what type of actions would lead to increased purchase of cyber insurance in OESs?

text: 50. In your opinion, what are the most relevant skills needed in your organisation at the time of acquiring an adequate cyber insurance coverage?

text: DEMAND SIDE OF CYBER INSURANCE IN THE EU 4.4 ANNEX D. SURVEY RESULTS

text: 1. What is the name of your organisation? In total 262 respondents completed the survey.

text: 2. Where is your organisation located?

text: 3. What sector is your organisation active in (top 10)?

text: 4. Is your organisation officially designated as an OES according to

text: Directive (EU) 2016/1148

text: 5. What is the size of your organisation by number of employees?

text: What is the size of your organisation by number of employees? Total No response 6 Large company (>250 employees) 183 Medium-size enterprise (<250 employees) 45 Micro-enterprise (<10 employees) 4 Small enterprise (<50 employees) 24 Grand total 262

text: 6. If insurance coverage is identified as a mitigation measure, who is responsible for procuring cyber insurance in your organisation? DEMAND SIDE OF CYBER INSURANCE IN THE EU If insurance coverage is identified as a mitigation measure, who is responsible for procuring cyber insurance in your organisation? Total No response 19 CFO or financial team 37 CISO or security team 34 Dedicated insurance manager or team 67 Executive manager 66 Other, please specify 39 Grand total 262

text: Section II. Risk identification, quantification, priorisation

text: 7. Does your organisation follow a formalised process to identify cyber risk? % Does your organisation follow a formalised process to identify cyber risk? Total 4.2 No response 11 18.7 No 49 77 Yes 202 100 Grand total 262

text: 8. Does your organisation follow a formalised process to decide which tools should be used to mitigate cyber-risk? Does your organisation follow a formalised process to decide which tools should be used to mitigate cyber risk? Total No response 13 No 72 Yes 177 Grand total 262

text: 9. Does your organisation quantify cyber risks (in EUR)?

text: Section III. Identification and selection phase

text: (Only presented if respondent has cyber insurance: presentation contingent to answer question 10)

text: 10. Does your organisation currently have cyber insurance?

text: Cyber insurance per region (Question 10 and 2 combined)

text: Western and northern Europe Number Percentage No 45 55 % Yes 37 45 % Grand total 82 100 %

text: Eastern Europe Number Percentage No 130 88 % Yes 17 12 % Grand total 147 100 %

text: Southern Europe Number Percentage No 20 61 % Yes 13 39 % Grand total 33 100 %

text: Cyber insurance and cyber risk quantification (Question 10 and 9 combined)

text: Does your organisation currently have cyber insurance? Does your organisation quantify cyber risks (in EUR)? No Yes Grand total No response 9 2 11 No 143 24 167 Yes 43 41 84 Grand total 195 67 262

text: 11. Has your organisation identified cyber insurance as a risk-mitigation tool?

text: 12. Has your organisation evaluated a concrete cyber insurance offer before, or would your organisation consider it in the future?

text: 13. Who supports your organisation during the initial orientation and selection process to buy cyber insurance?

text: 14. Who would support your organisation during the initial orientation and selection process to buy cyber insurance?

text: 15. How did your organisation know about cyber insurance offers?

text: 16. How satisfied are you with the offered cyber insurance coverage in respect to your risk exposure?

text: How satisfied are you with the offered cyber insurance coverage with respect to your risk exposure? Total percentage Unsatisfied 10 16 % Very satisfied 10 16 % Satisfied 44 69 % Grand total 64 100 %

text: 17. Which are or which would be the main selection criteria for acquiring cyber insurance services and products by your organisation?

text: 18. How did the insurance company conduct the intake assessment?

text: 19. How would you rate the duration of the assessment by the insurer?

text: 20. How would you rate the effort required during the assessment by the insurer?

text: 21. Has your organisation encountered any legal limitation (e.g. classified or internal documentation) in sharing information with the insurer during the assessment phase?

text: 22. Did legal limitations (e.g. classified or internal documentation) in sharing information with the insurer lead to a rejection or modification of the offer by the insurer? Did legal limitations (e.g. classified or internal documentation) in sharing information with the insurer lead to a rejection or modification of the offer by the insurer? Total No 56 Yes 4 Grand total 60 Current situation and coverage (Only presented if respondent has cyber insurance)

text: 23. Does your organisation have ‘insurance’ (other than standalone cyber policies or policies with a cyber add-on in place), which might cover damages from a cyber incident, (i.e. not explicitly excluding cyber events?) Does your organisation have ‘insurance’ (other than standalone cyber policies or policies with a cyber add-on in place), which might cover damages from a cyber incident, i.e. by not explicitly excluding cyber events, for example? Total Yes 64 No 131 Do not know 54 Grand Total 249

text: If you have cyber insurance, what does it cover? (Top 5 responses, N = 57) Total (Distributed) denial of service (DDoS) attack; malware; zero-day attack; 18 ransomware; stolen credentials – unauthorised access and use of data assets and computer systems; phishing; network interruption; network interruption OSP (Open Settlement Protocol); network interruption (Distributed) denial of service (DDoS) attack; malware; ransomware; stolen 3 credentials – unauthorised access and use of data assets and computer systems; phishing; network interruption; network interruption OSP (Open Settlement Protocol); network interruption (Distributed) denial of service (DDoS) attack; malware; ransomware; stolen 2 credentials – unauthorised access and use of data assets and computer systems; phishing; network interruption; network interruption: system failure; cyber extortion; data restoration; Extra (Distributed) denial of service (DDoS) attack; malware; ransomware; network 2 interruption; network interruption: system failure; cyber extortion; data restoration; extra expense; administrative investigation and penalties; data protection and cyber liability (Distributed) denial of service (DDoS) attack; malware; zero-day attack; 2 ransomware; stolen credentials – unauthorised access and use of data assets and computer systems; network interruption; network interruption OSP (Open Settlement Protocol); network interruption

text: 27. If your organisation does not have cyber insurance, what would you consider getting insurance coverage for? Responses were varied and included: ransomware attacks, reputational damage, business interruption due to a cyberattack, data theft, restore basic services, legal coverage and incident response services, forensics support, etc.

text: 29. What do you see as a major challenge in your cyber insurance policy? Section IV. Contractual phase (Only presented if respondent has cyber insurance)

text: 31. To what extent was the contract tailored to your organisation? To what extent was the contract tailored to your organisation? Total Completely negotiable 3 Partially negotiable 34 Standard template (non-negotiable) 24 Grand total 61

text: 32. Did the existence of certifications (e.g. ISO 27001) have an impact on the contractual agreement?

text: 34. When purchasing cyber insurance were you clearly informed about any embedded exclusions and the limitations of the coverage, including for risks arising from a systemic event? When purchasing cyber insurance were you clearly informed about any embedded exclusions and the limitations of the coverage, including for risks arising from a systemic event? Total Do not know 17 No 9 Yes 34 Grand total 60

text: 35. When purchasing cyber insurance were you presented with a list of examples of events that are excluded from the coverage? When purchasing cyber insurance were you presented with a list of examples of events that are excluded from the coverage? Total Do not know 17 No 23 Yes 19 Grand total 59

text: Section V. Coverage maintenance and support

text: Pre-incident support 36. Did your insurance company provide support in prevention of cyber incidents?

text: Did your insurance company provide support in prevention of cyber incidents? Total No 36 Yes 24 Grand total 60

text: 37. If you have yet not acquired cyber insurance, how relevant would this support be for you? If you have not yet acquired cyber insurance, how relevant would this Percentage support be for you? Total Extremely necessary 16 20 Relevant 57 32 Normal 72 40 Not relevant 33 18.5 Grand total 178 100

text: Post incident support 38. Does your cyber insurance company provide incident support?

text: Does your cyber insurance company provide incident support? Total No 19 Yes 40 Grand Total 59

text: Maintenance 39. Has a cyber incident led to an increase of costs or denial of coverage?

text: Has a cyber incident led to an increase of costs or denial of coverage? Total Do not know 11 No 13 No incident observed 30 Yes 6 Grand Total 60

text: Section VI. Claim procedure

text: 41. Was the claim approved? Was the claim approved? Total No 2 Yes 6 Grand Total 8

text: 42. Was the reimbursement enough to cover the cost of the damage?

text: 43. Was the claim processed in a timely manner according to the contract?

text: 47. Was your claim approved? (Following previous question) No responses given. Section VII. Respondent opinion

text: 48. In your opinion what type of actions would lead to increased awareness of cyber insurance as a risk mitigation in OESs? Top 10 responses In your opinion what type of actions would lead to increased awareness of cyber-insurance as a risk mitigation in OESs? Communication and dissemination Communication and dissemination; better coverage Better coverage Communication and dissemination; peer-learning exercises; ad hoc collaborative networks Research and scientific evidence; communication and dissemination Communication and dissemination; public support; better coverage Communication and dissemination; peer-learning exercises Research and scientific evidence; communication and dissemination; peer-learning exercises Communication and dissemination; peer-learning exercises; better coverage Research and scientific evidence; peer-learning exercises; better coverages Research and scientific evidence; communication and dissemination; better coverage Grand total

text: 49. In your opinion what type of actions would lead to increase purchase of cyber insurance in OESs? Top 10 responses In your opinion what type of actions would lead to increased purchase of cyber-insurance in OESs? Total Better coverage; fewer exclusions; clearer policy wording 34 Communication and dissemination 24 Communication and dissemination; better coverage; clearer policy wording 19 Better coverage; fewer exclusions 17 Communication and dissemination; better coverage; fewer exclusions 16 Better coverage 15 Communication and dissemination; better coverage 12 Better coverage; clearer policy wording 12 Communication and dissemination; clearer policy wording 12 Clearer policy wording 9 Grand total 170

text: 50. In your opinion, what are the most relevant skills needed in your organisation at the time of acquiring an adequate cyber insurance coverage? Top 10 responses In your opinion, what are the most relevant skills needed in your organisation at the time of acquiring an adequate cyber-insurance coverage? Total Risk assessment; legislation; information management 40 Risk assessment 32 Risk assessment; functioning of the insurance market; legislation 25 Risk assessment; legislation 22 Risk assessment; information management 22 Risk assessment; functioning of the insurance market; information management 18 Risk assessment; data mining and analysis; information management 17 Risk assessment; functioning of the insurance market 12 Risk assessment; legislation; data mining and analysis 8 Information management 7 Grand total 203 -N -EN -095 -22 -04 TP

text: ABOUT ENISA

text: ISBN 978-92-9204-586-9 doi: 10.2824/94949