French reinsurance giant SCOR does still not feel that the re/insurance industry has mastered cyber to a level where it is able to underwrite on a big scale.
Speaking in Monte Carlo today at the Reinsurance Rendez-vous, Victor Peignet, CEO of SCOR’s Global P&C division explained that, while they’ve been putting in place a dedicated cyber team that is “Making good progress”, the company remains “Extremely cautious about underwriting cyber”.
Speaking alongside SCOR CEO Denis Kessler, the pair cited quantification of cyber risk as one of the primary obstacles.
“The major difference between cyber and natural catastrophe is that cyber can become a worldwide event in a matter of seconds,” said Peignet.
Peignet went on to express concern regarding accumulation risk and the extent to which the industry is struggling to overcome its inherent complexities.
Accumulation risk can occur when a single large event or a series of consecutive events make affirmative cyber insurance unprofitable, or if insurers and reinsurers underestimate cyber exposures, which could result in unplanned shocks from a major event.
Peignet’s remarks came just hours before Torsten Jeworrek, Chairman of Munich Re’s Reinsurance Committee, expressed a concern that the re/insurance industry risks becoming irrelevant by avoiding the challenge of tackling cyber risk.
Despite the varying degrees to which re/insurers are actively transforming their cyber security culture and investing in developing the means to effectively model and understand the risk’s potential impact on profitability, Peignet illustrates an industry-wide concern that the major players remain inadequately positioned to act should a massive cyber loss event occur in the near-future.
