ZURICH, August 17, 2018 /PRNewswire/ --
Cyber insurance offerings and premium volumes have expanded sizeably. Keeping up with demand is challenging and sustainable growth in the cyber insurance market should not be taken for granted, as accumulation risks need to be addressed in the context of a hyperconnected digital world.
(Logo: https://mma.prnewswire.com/media/714100/Geneva_Association_Logo.jpg )
(Photo: https://mma.prnewswire.com/media/731756/Cyber_accumulation_risk_Infographic.jpg )
The study 'Advancing Accumulation Risk Management in Cyber Insurance', released by The Geneva Association, the leading international think tank of the insurance industry, identifies three prerequisites to ensure sustainability of cyber insurance. First, customers and insurers must facilitate resilience at the source of risk. Second, insurers need to make an acceptable return on capital. And third, available capital must absorb shocks from accumulation risks.
Anna Maria D'Hulster, Secretary General of The Geneva Association, said: "Expanding the boundaries of insurability is not new for insurers. However, cyber risks are taking us into uncharted territory. Both exposures and threats have distinct characteristics, bringing unprecedented challenges."
The report highlights four cyber accumulation risk challenges:
In response, insurers have developed several approaches:
Daniel Hofmann, Senior Advisor Insurance Economics at The Geneva Association and primary author, said: "Cyber risk has distinct characteristics. Exposure bases are hard to define and measure. Historical claims data are scarce and not good predictors. Threats are constantly evolving, can spread widely and rapidly, and a series of consecutive large events is plausible. Moreover, a high degree of interconnectivity may result in potentially boundless impacts."
Links:
Full reportFour-page summaryAddressing cyber risk accumulation hubpage
