Collaboration among stakeholders in the risk and insurance industry to tackle evolving cyber risks is essential, a recent report from Federation of European Risk Management Associations (FERMA) has stated, with individuals like Martin Kreuzer, Senior Risk Manager Cyber Risks at Munich Re, highlighting that re/insurance cannot absorb the number of risks that come with rising cyber incidents alone.
The report was produced in partnership with leading industry players including Allianz Global Corporate & Specialty, AXA XL, HDI Global, Howden, Lloyd’s Insurance Company (Europe), Marsh, and Munich Re.
Commenting on the report, Kreuzer mentioned a number of relevant points that he believes highlight how cyber re/insurance is already driving cyber resilience. At the same time, he also emphasised that collaboration is key as neither insurance nor reinsurance alone can absorb the amount of risks that come with rising cyber incidents.
He said: “I think it’s very important to note that cyber insurance and cyber reinsurance already are a key driver for cyber resilience. You were mentioning security controls, you were mentioning expertise that we all add to the market, and I think that also in other lines of business we have already done a very good job in the past.
“Just think of the seatbelt car insurance, or fire protection via detection. So we will for sure remain a key player in that segment as well.”
Kreuzer continued: “The second bullet point is that this transfer and affiliated services have already proven to work in practice, especially when it comes to claims, but also recovering from a cyber attack. And I’m not only talking about our internal claim statistics, I think we can also use external sources.
“Like the latest IBM cost of data breach report that states that the risk owner that has been affected by a data breach had a much, much better, and less cost-intensive recovery from that cyberattack.
“The third bullet I would like to make is that with our expertise, our risk quantification and our data, we already have a strong part and we strongly advocate to improve risk assessment, risk quantification and the whole understanding of the underlying exposure.”
Kreuzer concluded: “Neither insurance nor reinsurance alone can absorb the whole bunch of risks, especially talking about risks that may not be modelled, but also not be transferred.
“Cyber war, for example. It is a catastrophic cyber event that might have a global impact on societies and economies throughout the world. But this is also why we are here, to reach out to the European Union, to reach out to further and intensify collaboration just to close that gap that might exist.”