In a recent earnings call, Munich Re CEO Joachim Wenning highlighted the imperative need for governmental intervention in the face of escalating cybersecurity threats, shedding light on the limitations of private insurance in covering these risks.
Wenning underscored the critical nature of cybersecurity, stating, “Cyber is not just important for us. Cyber is an incredibly important product for our customers as well.”
He emphasised the company’s global advocacy for cyber resilience and sustainable insurance markets, citing their responsibility in addressing these issues.
Addressing concerns about the adequacy of protection against cyber risks, Wenning revealed findings from a global cybersecurity survey, stating, “87% of managers believe that they are not sufficiently protected.”
He also noted the stark reality that “less than 1% of claims in the cybersecurity area are insured,” indicating a significant gap in coverage.
Highlighting the magnitude of systemic risks such as the breakdown of critical infrastructures or cyber warfare, Wenning asserted, “The largest risks… cannot be covered by the private insurance because the potential losses far exceeded the equity of the entire industry.”
He stressed the necessity for government support in managing these catastrophic risks.
Wenning pointed to ongoing discussions in countries like the United States regarding governmental backstops for cybersecurity, expressing hope for similar initiatives in Europe. He emphasised the urgency of the matter, stating, “That’s cyber.”
Despite the challenges, Wenning acknowledged Munich Re’s leadership in the cyber insurance market, stating, “With cyber, the underwriting volume at the moment is at about €2 billion per year. With that, we are clearly the market leader.” He highlighted the company’s track record of profitability and risk management in this sector.
Commenting on future prospects, Wenning expressed optimism about continued growth in demand for cyber insurance, citing strong and increasing demand alongside growing risk exposure for private companies.
However, he noted a potential obstacle in exclusion clauses related to cyber warfare and similar factors.
In conclusion, Wenning’s address underscored the pressing need for collaboration between the public and private sectors to address the evolving landscape of cybersecurity risks, emphasising the role of government support in mitigating systemic threats.
