The UK’s government-backed mutual terrorism reinsurer, Pool Re, has said that from April 2018 it will expand its coverage to include material damage and direct business interruption (BI) as a result of cyber terrorism.
According to an announcement from the terrorism reinsurance pool, the cover excludes intangible assets and will be made available to all policyholders which purchase terrorism protection from members of Pool Re.
Pool Re’s Chief Executive Officer (CEO), Julian Enoizi, said; “We will continue to evolve our coverage and today’s announcement is an effort to future proof the Scheme and to close a potential gap in coverage before it became apparent.
“The threat from a cyber-attack is evident and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them. This was a clear gap in our coverage which left businesses potentially exposed. After rigorous analysis, we determined that we can close this gap. It is a pivotal moment for Pool Re which establishes a new standard for terrorism cover and places the UK at the forefront of nations reinforcing their economies against emerging risks.
“It is also an indication of what can be achieved through cross-industry, academic and governmental collaboration. We will continue to research and evaluate other emerging terror threats as they become evident.”
The coverage extension to include physical damage from cyber terrorism comes after more than two years of work, and is based upon research commissioned for the Centre for Risk Studies at University of Cambridge Judge Business School.
Director of Research and Innovation at the Cambridge Centre for Risk Studies, Simon Ruffle, commented; “The Centre has applied an academic approach to modern business, enabling a deep analysis of current geopolitics and technology in order to illuminate the shape of an emerging threat to the UK economy. The cyber terrorism scenarios we examined provide insight into what types of attacks might be possible in the next few years that could impact Pool Re’s portfolio.”