Christian Mumenthaler, the Chief Executive Officer of reinsurance giant Swiss Re, has called for governments to step up and support the industry on cyber risks, a class of business where the reinsurer wants to be “underweight.”
Speaking to the Financial Times in a recent interview, Mumenthaler explained that he and Swiss Re see a role for governments in providing a back-stop for cyber risk re/insurance, to help the industry avoid accumulation risks and over-exposure.
Mumenthaler likened cyber risks to terrorism, saying that a government supported backstop is required as has been seen with terror risks, “otherwise the public market cannot really develop fully.”
However he said that government appetite to discuss supporting insurers and reinsurers in writing cyber risks is “zero” at the moment.
Mumenthaler stressed the importance of diversification when underwriting risks like cyber to the FT, saying that accumulation risks limits the amount of cyber risk that Swiss Re will underwrite.
“We can write a little bit of cyber but we don’t want to be overweight in this risk field. We want to be underweight,” he explained in the interview.
Mumenthaler has previously said that he is “extremely skeptical about cyber” and that it’s “probably not insurable.”
However, with improved technology, more targeted coverage and the support of backstops (which could be governments or even the capital markets) reinsurers like Swiss Re are likely to find the demand for solutions to support cyber risk transfer so overwhelming that they will begin to find ways to underwrite more of this exposure.