Reinsurance News

Senior industry figures call for public-private partnership to tackle cyber risk

2nd October 2020 - Author: Charlie Wood

The world’s reliance on online technology has grown to such an extent that it may surpass the insurers’ ability to fully protect it, according to a number of senior industry professionals interviewed by CyberCube Chief Executive Officer Pascal Millaire.

cyber-securityIn the interviews, conducted as part of a new series of NetDiligence webinars, AXIS Capital CEO Albert Benchimol said a public-private partnership would be necessary to manage the world’s largest cyber aggregation events.

“My personal view is that ultimately, for the largest aggregation events, we’re probably going to need some sort of private-public partnership, whether it’s a Pool Re or a Pandemic Re of some sort, or a Cyber Pandemic Re,” Benchimol explained.

Benchimol added that the economic consequences of the COVID-19 pandemic have emphasised the extent to which insurers are exposed to a risk as all-encompassing and potentially catastrophic as cyber.

Stefan Golling, Chief Underwriter for Munich Re, said there was a role for alternative capital to support the cyber insurance market.

In his interview with Millaire, he stated that there are risks involved in cyber that are maybe so systemic that the capacity of the market could come to its limits.

“Maybe we see the first signals that the alternative capital is showing some interest in cyber products, and I’m sure, in a couple of years, there will be more,” Golling said.

“We certainly also have to talk about private-public partnerships to simply overall increase the capital base provided to the cyber product.”

Sean Ringsted, Chief Risk Officer and Chief Digital Officer for Chubb, also called for discussions to take place.

“The insurance industry can and will do more because our clients demand that,” Ringsted explained.

“But at some point, I think you are entering a time and space where there need to be discussions around public-private partnerships to be able to address some of the really, really significant tail risk that could potentially arise in some of the scenarios.”

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