A new report from the Federation of European Risk Management Associations (FERMA), produced in partnership with Marsh and Howden, warns that cyber insurance should be treated as a complement to robust cybersecurity measures — not as a substitute.
The report, titled Demystifying Cyber Insurance: Today’s Trends & Tomorrow’s Challenges, examines ongoing challenges in the European cyber insurance market, including limited uptake, coverage gaps, and persistent doubts among corporate risk managers.
“A new Federation of European Risk Management Associations … has reinforced the message that cyber insurance should not be seen as a replacement for robust cybersecurity measures, but should rather act as a ‘complementary tool’ to help organisations manage and transfer financial risks associated with cyber incidents,” the report stated.
The report adds that while demand for cyber policies has grown, many companies — particularly small and medium-sized enterprises — still view insurance with caution. The concerns often stem from exclusions, especially for war and systemic risks, the removal of cyber cover from traditional policies, and disputes over claims handling.
“Although challenges undeniably remain, a lack of awareness and understanding about cyber insurance products contributes to underestimating the value cyber insurance can bring to organisations,” FERMA’s Digital Committee Chair, Philippe Cotelle, said.
The report calls for organisations to conduct thorough assessments of their exposures and review all existing policies to detect gaps or overlaps in coverage. The study also highlights the need for closer collaboration with brokers and more training for professionals involved in cyber risk management.
“Ultimately, achieving a more stable and resilient economy requires a collaborative approach … offering more relevant, transparent, and value-driven solutions in a rapidly changing risk landscape,” FERMA President Charlotte Hedemark stated.