While cyber cover has often been heralded as one of the biggest re/insurance opportunities of the future, the Chief Executive Officer (CEO) of reinsurer Swiss Re, has a very different take on the realities of the emerging risk, saying that despite the hype he remains “extremely skeptical about cyber.”
Speaking at the annual reinsurance conference in Monte-Carlo, Christian Mumenthaler, said: “The more you talk to specialists the more you come to the conclusion that it’s more likely that’s probably not insurable.
“I think it’s clear the risk is accumulating. But the more intelligence we gather from the difference countries, and the more places we go, the more clear it is that very significant damage can be created by some parties to other countries.
“It is a big risk so insurance should play a role so in these situations the only solution I can imagine, is if the states knows that there’s this whole series of risks which ultimately reinsurance cannot carry – “so far I haven’t heard of any solution, without government support, that’s convincing in my mind.”
Swiss Re has taken a cautious approach to cyber risk, monitoring how it develops, and watching the risk emerge without much direct involvement, “it is in the market, and sometimes they sneak it into other policies, so I don’t think we’ve achieved maturity.
“We need to be aware of developments, but we remain underweight, that’s our goal,” said Mumenthaler.
“You have things like cyber, big pandemics, and underneath that there are things the industry could insure, if you take out the accumulation risk, obviously there’s a lot that could be done at a cheaper price, but currently we’re not there.”
The reinsurance giant CEO added that with recent geopolitical developments, a cyber attack on a previously unprecedented level is a possibility in the hands of the world’s superpowers.
“What states know is that it’s Russia, China and the U.S. that have significant capabilities to attack others critical infrastructure. They don’t do it, they just have the capabilities. That’s a known fact in the intelligence community.
“I think all you need to know is that the infrastructure is just vulnerable. I think experts are aware of that and therefore it’s absolutely possible to have a 9/11 moment in the cyber world. With all the developments we see, it’s thinkable. The biggest capabilities are with these countries, more than with any hacker,” he said.