It’s a somewhat sobering thought that, whilst we still struggle to get many companies to insure their cyber risk, the market could run out of capacity because the worldwide risk is just too big…:
Senior insurance professionals worry that the world’s dependence on online technology has grown so great that it may surpass the industry’s capacity to fully protect it, according to CyberCube.
That was the upshot of a series of interviews conducted by CyberCube CEO Pascal Millaire for the company’s NetDiligence webinar series.
“My personal view is that ultimately, for the largest aggregation events, we’re probably going to need some sort of public-private partnership, whether it’s a Pool Re or a Pandemic Re of some sort, of a Cyber Pandemic Re,” AXIS Capital president and CEO Albert Benchimol told Millaire. “I don’t know that there is enough capital in the industry to be able to fully support the amount of economic damage. COVID-19 was a really good glimpse into how much exposure you have. Imagine if we shut down all our IT systems for a month. How much economic value would we as a society have lost?”
Benchimol told Millaire that the industry should think of cyber accumulation as “COVID on steroids.”
“Because COVID is a natural occurrence,” he said. “A virus doesn’t aim for one country or another.”
Munich Re has an estimated 10% share of an approximately US$7 billion cyber insurance market. The company’s chief underwriter, Stefan Golling, told Millaire that there was a role for alternative capital to support the market.