Munich Re: Demand for cyber insurance growing rapidly; customers need more than just insurance
Demand for suitable insurance cover and prevention and recovery services is growing exponentially. "The losses from cyber-attacks clearly demonstrate that cyber constitutes one of the biggest global risks. It presents the insurance industry with both a challenge and an opportunity to develop and offer solutions for cyber risks," Doris HOEPKE said.
Digitalisation is progressing at a tremendous pace in all industries, providing means of increased efficiency and improving client satisfaction, but also changing the risk landscapes of companies. Cyber risks are without a doubt one of today's greatest threats. Unlike traditional lines of insurance such as Nat Cat, fire and motor, cyber risks are global: no market, sector, or company is spared, irrespective of its size.
HOEPKE emphasized, "Protection against cyber risks could successively develop into an important field of business in its own right. As a global reinsurer, we accept the challenge of drawing up solutions for this new risk profile. Not to do this would be the biggest risk of all."
Cyber risks present the insurance industry with significant challenges. Very little long-term loss data is available, making it impossible to conduct a risk assessment using conventional models. In addition, the risks themselves are changing as digitalization gains pace. This calls for flexible solutions that offer much more than just insurance coverage. Unknown cyber risks can even be found in many existing traditional insurance policies, as the contractual conditions either did not exclude these risks or did not draft the exclusions with sufficient accuracy.