The last risk study and analysis conducted earlier this year by the AMRAE, has shown that cyber risks are the most worrying risks for insurers. It is the second year in a row that it ranks 1st in this yearly study.
During the last “Rendez-vous de Septembre », that took place in Monte Carlo a few weeks ago, Christian Mumenthaler, CEO of Swiss Re described cyber risks as extremely complex, due to their constant change and evolution, but also given their lack of statistics history. « It is a very high risk that can affect anyone and everyone, anywhere, at the same time. This combination makes it a very complex risk to (re)insure.”.
However, Swiss Re was one of the first reinsurers to investigate on products covering cyber risks, and that launched in 2017 the Swiss Re Institute, whose 1st publication was related to cyber risks. As this risk is difficult to assess, prevention remains the best option for most of the insurers.
AXA XL has also chosen this option: they recently announced a new partnership with Accenture in order to provide cybersecurity services to their clients, and to train their underwriters and sales teams on this specific branch. “We believe there is a huge potential for a differentiated cyber-security proposition through our partnership with AXA XL,” said Max Richter, Accenture UK’s General Insurance sector lead and the company’s global account lead for AXA XL.
Future will tell how the other (re)insurers choose to tackle this niche insurance cover. Given the nature of this risk, only claims will allow us to have a proper statistic history to price it in the most profitable way. What would happen if a cyber-attack struck the whole world? According to Christian Mumenthaler, even reinsurance would not be enough, and the different states would have to chip in.
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