Global reinsurance firm Munich Re has said that it is preparing for “exponential” growth in demand for cyber re/insurance coverage by developing updated, flexible solutions and exploring new technology-based partnerships.
In a recent statement, the reinsurer noted that the cyber threat is developing rapidly alongside digitalisation efforts, and is a risk for almost every market, sector and company around the world, irrespective of their size.
However, Munich Re said that it is small and medium-sized enterprises and primary insurers that will require the most support, adding that it is developing new services targeted at these clients, such as technical analysis, prevention measures, security standards reviews, forensic investigation, and data recovery.
Additionally, it intends to continue its practice of cooperating and partnering with specialised technology companies in order to secure the knowledge required for a “holistic approach” to cyber risk.
“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,” said Doris Höpke, a member of Munich Re’s Board of Management.
Munich Re stated that it faces several challenges in developing new cyber solutions, including a lack of long-term loss data, the fast-changing nature of the risk, and issues related to unknown ‘silent cyber’ risks that may be found in existing traditional insurance policies.
“Protection against cyber risks could successively develop into an important field of business in its own right,” Höpke continued. “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.”
The company estimates that the market volume for cyber insurance will grow to US $8-9 billion by 2020 – more than double the value for 2017 – and will continue to increase exponentially.
“The demand for cyber risk covers is growing continuously,” added Höpke. “We therefore see it as our duty to develop solutions.”
