Financial Institutions Strategizing Against Cyber Threats
GIB Insurance Brokers launches a new division to tackle the growing cyber risks faced by financial institutions.
Cyber risk extends beyond mere technology for financial institutions, impacting their entire operational landscape. A cybersecurity breach can quickly escalate into regulatory scrutiny, legal disputes, and accountability queries directed at the board members. In response to these emerging challenges, GIB Insurance Brokers has introduced a dedicated division for Financial Institutions, under the leadership of Greg Harrup, who brings over a decade of experience in broking and underwriting.
Bridging Insurance Gaps
Financial institutions handle vast amounts of money and sensitive data, relying on intricate systems and third-party providers. However, the way policies for cyber risks, Directors and Officers (D&O), Professional Indemnity (PI), and crime are often arranged can lead to significant coverage gaps. GIB's new division aims to offer comprehensive, structured insurance policies that integrate various risks across the organization.
Adapting to a Shifting Risk Landscape
Harrup emphasized that the integration of these services was essential due to changing client needs. He notes, “Financial institutions are specialized risks, but the nature of their vulnerabilities has evolved. A breach is no longer just a breach; it triggers a whole cascade of responses, including engagement with regulators and legal counsel.” According to the South African Banking Risk Information Centre (SABRIC), the claims related to digital banking crime reached R2.4 billion in 2025, marking a 29.2% increase mainly attributed to social engineering fraud and impersonation schemes.
Cyber risk has ascended to the boardroom in Africa, as highlighted by EY. Increasing threats lead to higher organizational exposure, resulting in potential operational disruptions, compliance issues, and reputational damage. Cybersecurity has transitioned from being solely an IT concern to a critical business risk requiring strategic oversight from board members.
Challenges in Assumptions about Coverage
Harrup cautions against the assumption that mere insurance coverage ensures protection. Institutions may possess both cyber and crime insurance but could still find vulnerabilities due to differing policy terms. Understanding how each policy interacts in realistic loss scenarios is crucial. Institutions need to assess which policy would apply and identify any potential coverage gaps.
The Importance of Cybersecurity Governance
The fallout from a cyber incident stretches far beyond technical recovery. Financial losses, client attrition, reputational harm, and mandatory disclosures to regulators can all follow. As Harrup aptly states, “None of that gets resolved by the IT department.” Insurers are now focusing on governance, assessing not just technical defenses but also the effectiveness of response plans and third-party relationships.
The reliance on third-party services underscores this reality. As Harrup puts it, “You can outsource the service, but you can’t outsource the blame.” Financial institutions must recognize their essential suppliers, understand contractual risks, and evaluate whether their insurance appropriately covers third-party service disruptions.
From Reactive to Proactive Resilience
To enhance resilience, Harrup recommends moving past the traditional annual renewal process. He advocates for collaboration between risk, compliance, IT, finance, and board members to conduct realistic scenario evaluations and stress-test insurance policies. “Most institutions discover uncomfortable truths the first time they undertake this,” says Harrup. “Learning in a controlled environment is preferable to facing challenges during an actual claim.”
As cyber threats continue to evolve, accountability within financial institutions becomes paramount. This drives the need for an insurance partner who understands the broader picture beyond just upcoming renewals. The newly established GIB division aims to support various clients, including banks, asset managers, real estate investment trusts (REITs), insurers, retirement funds, fintech companies, and others in navigating these complexities.
