Cyber Protection Gap: Challenges and Remedies

Various challenges including the rapidly evolving cyber threat landscape and uncertainties around the insurability of cyber risks have exposed the growing cyber protection gap, where organizations' cyber risk exposures exceed their available coverage. While cyber economic losses are projected to exceed a few trillion USD, cyber insurance premiums are around a few billion USD only. This paper aims to quantify the cyber protection gap using two methods: analysis of industry data on global cyber insurance uptake, and case studies of high-profile cyber incidents. The study identifies key challenges contributing to the cyber protection gap, including insufficient risk awareness, coverage limitations, and lack of cyber risk modeling capabilities. To address these issues, the paper proposes several remedies. These findings offer valuable insights for organizations, insurers, and policymakers to strengthen organizational cyber resilience and narrow the widening cyber protection gap.