"There is an element of unpredictability that is very unsettling, and I understand where [Buffett] is coming from, but I think it is really hard to avoid cyber risk entirely," Glombicki said. He added though that there has still been no significant litigation that assigns culpability or tests the boundaries of the policies, and until the courts hear some culpability cases, some insurers may proceed more cautiously. "Right now [cybersecurity insurance] is still a viable business model for many insurers," Glombicki said.
It is still a tiny market, representing only one percent of all policies issued, according to Glombicki. Because the cybersecurity business is so small, it gives insurance companies latitude to implement various policies to see what is working, and what isn't, without a tremendous amount of exposure. Industry analysts generally say while some of Berkshire's caution is warranted, the general state of the cybersecurity insurance marketplace is stabilizing as it becomes profitable.
And Gerald Glombicki, a senior director in Fitch Rating's U.S. insurance group, points out that Berkshire Hathaway is issuing cybersecurity policies despite Buffett's caution.
According to Fitch's analysis, Berkshire Hathaway is the sixth-largest issuer of such policies. Chubb, which Berkshire recently revealed a big investment in , and AIG are the largest. "There's no place where that kind of a dilemma enters into more than cyber," Buffett said.
"You may get an aggregation of risks tha.
