Further collaboration and discussion is needed around the response to, and definition of, cyber terrorism, while more broadly, divergent views around the insurability of cyber risk remains across the commercial market.
This is according to delegates that attended the 2019 International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP) conference, held in Brussels. The 2019 edition of the annual event was attended by almost 200 people from across the industry, including international terrorism reinsurance pools, insurers, reinsurers, security specialists, academics, and thought leaders.
The event covered numerous topics related to the terrorism risk transfer space, including the cyber terrorism arena, which, speakers described as one of the areas of the market that requires further collaboration amongst global reinsurance pools around how to best define cyber terrorism and also how to adequately and effectively respond to this type of event.
Furthermore, IFTRIP notes that during a lively debate, it become evident that across the commercial space, views around the general insurability of cyber risk and the necessity for some form of risk pooling or government intervention vary, with some of the sector highlighting an urgent need to model the risk and meet the challenges as a private market.
“The conference’s discussions covering propositions and cover, cat bonds, modelling and technology, cyber as well as the perspectives of customers, insurers, victims and brokers were fascinating and revealing. Given the growing worldwide threat from terrorism and its effects, these issues are rightly top of the agenda and this opportunity to share expertise and understanding at IFTRIP is unparalleled.
“I am already looking forward to continuing our conversations at the next meeting in Washington DC in June 2020,” said Julian Enoizi, Secretariat of IFTRIP and Chief Executive Officer (CEO) of Pool Re, the UK’s government-backed terrorism reinsurer.
Pool Re’s recently launched non-damage business interruption cover was also discussed, as was the world’s first terrorism catastrophe bond transaction, Baltic PCC Ltd, designed to move UK taxpayers even further from the risks that Pool Re mutualises on their behalf.
Conference speaker Florian Steiger, who serves as Cat Bond Strategy Lead at specialist insurance-linked securities (ILS) fund manager, Twelve Capital, discussed in more detail the potential for more terror risk to find its way to the capital markets, with investors keen to diversify away from the highly competitive natural catastrophe space.
Ultimately, heard attendees, for further growth of terrorism coverage in the ILS space, improved modelling and an increased understanding of the risk is needed so that investors can feel comfortable taking on the risk.
Just last week IFTRIP announced the launch of a joint cyber terrorism task force with the Geneva Association (GA), designed to conduct research on cyber terrorism across the insurance and reinsurance space.