The re/insurance industry’s biggest threat is no longer natural disasters but successful cyber-attackers, and companies across all sectors must do more to defend themselves against the growing cyber threat, warns Lloyd’s of London Chief Executive Officer (CEO), Inga Beale.
Speaking at the Asian Financial Forum, Beale highlighted the potentially huge costs of cyber-attacks, warning that a sophisticated, clever attack could result in losses to insurers and reinsurers that dwarfs those of natural catastrophe events, such as hurricanes Sandy and Katrina, for example.
Companies across all sectors remain underprepared for cyber threats and, combined with the lack of experience and historical data for the modelling and pricing of cyber risks available to the insurance industry, the potential for truly huge losses from a cyber breach appears to be very real.
Discussing the issue, and speaking with South China Morning Post, Beale said; “There are substantial insurance gaps, as a majority of cyber risks are not covered by any form of insurance.
“Just like natural catastrophes, cyber events such as hacker attack or internet failures can cause severe impact on businesses and economies.”
The emerging and rapidly evolving cyber risk space is viewed as one of the re/insurance industry’s biggest challenges and opportunities, and the sector has started to take steps in the right direction in order to provide adequate and affordable protection for a relatively new and potentially devastating peril class.