What are the challenges in underwriting cyber insurance policies?

Insurers find it challenging to calculate premiums for cyber insurance policies due to the evolving nature of cyber risks, lack of historical data, difficulty in assessing potential losses accurately, and the complexity of estimating the financial impact of a cyber incident. Businesses influence this process by providing detailed information about their cybersecurity measures, risk management practices, past incidents, and overall security posture. By demonstrating strong cybersecurity practices and risk management strategies, businesses can potentially lower their premiums. Conversely, companies with weaker cybersecurity safeguards may face higher premiums or even difficulty in obtaining coverage.