Munich Re wants to help the re/insurance industry approach the cyber challenge as an opportunity for “sustainable new business,” rather than as an insurmountable obstacle to be overcome.
This is according to Jurgen Reinhart, Munich Re’s Chief Underwriter for Cyber, who told Reinsurance News that the company was “ready to accept the challenge” of tackling cyber as it continues to build up its internal expertise.
“We cautiously participate in growing primary and reinsurance business worldwide and are aiming to keep our 10% market share in the growing cyber market,” Reinhart said in an interview.
“Our approach is based on understanding cyber risks, assessing them adequately and thus making them insurable. This can only be done in close cooperation with experts from insurance and reinsurance, insureds and external partners, in order to develop a common understanding of how cyber risks should be dealt with,” he explained.
“In addition to risk transfer, this also includes risk management services and security measures. To this end, we deploy our global cyber teams and rely on a network of renowned external partners to complement our own knowledge and range of services.”
Munich Re has previously estimated that the cyber re/insurance market will grow to around $8-9 billion in 2020, which would be double the volume compared to 2017.
Reinhart noted that this growth will be driven by ongoing digitalisation and increasing interdependencies, as well as more awareness within top-level management due to the impact of cyber incidents.
“Each cyber incident shows current vulnerabilities and clearly outlines that every business may be affected – apart from size, location or industry,” he said.
“Whereas high-profile incidents often make it to media headlines, often smaller or mid-sized companies may be affected by the same kind of attack posing an existential threat to them. This is for sure is one important reason why demand and take up rates for cyber policies are growing throughout all kind of industries.”
Additionally, Munich Re is seeing more obligations imposed on the supply chain as requiring both higher standards of cyber security and more cyber insurance, while global legal developments, such as data protection laws, will also foster demand.
“As a consequence we do not only see more demand, but also growing cyber insurance offerings,” Reinhart noted.
The U.S currently dominates the global cyber market with an overall share of 75-80%, but Munich Re anticipates that other areas in Europe and Asia will rapidly catch up.
“Cyber insurance is much more than mere risk transfer,” Reinhart continued. “Building up services to foster resilience is part of a comprehensive service model we need to offer.”
“For our clients we do not only offer risk transfer solutions but primary insurance product development via co-creation, white label product solutions and a comprehensive service model,” he added.
“We have strong links to the technology industry from the tech giants to the global startup community and are investigating ways to partner to offer our clients valuable risk solutions, leveraging the latest technological solutions. Additionally we assist our clients in understanding the known and unknown perils in order to avoid surprises.”