Capsicum Re, the specialist reinsurance broker, today addresses the important market issue of cyber insurance coverage and perceived acts of warfare. The topic is discussed in a new Capsicum Re white paper entitled “Cry Cyber and let slip the dogs of War”: Exploring the issues of attribution in the context of War and Cyber.
The paper presents an objective discussion around some of the complex issues associated with the cyber peril, specifically in relation to war. It aims to help the wider (re)insurance market better understand why the attribution of cyber losses presents a real challenge to (re)insurers, and looks at how the market has begun to address the issue.
At the centre of the discussion are the significance of the “Attribution Line”, the shortcomings of historical definitions of war and war exclusions in the cyber context, and why the role of the reinsurer is crucial in reaching a working and accepted solution. It includes, for discussion, a model ‘Reinsurance-Led War Exclusion’ and a ‘Cyber-centric War exclusion’.
Ian Newman, global head of cyber at Capsicum Re, said: “Cyber is a peril, not just a class of business. The risk landscape has evolved, and the historically well-defined line between excluded acts of war and otherwise covered perils has become blurred in the context of cyber. As a market it is our duty to redefine the boundaries to ensure that we are able to continue to provide certainty of cover to our clients.”
Rupert Swallow, Capsicum Re chief executive, said: “With this paper, Capsicum Re’s award-winning cyber team has once again showed its market leadership by grappling with an issue of serious concern to insurers, reinsurers, and, most important, to insurance buyers. From completing the world’s only cyber Industry Loss Warranty, to building a cyber consortium and placing the largest-ever individual cyber deal, Ian and his team have continuously broken new ground in this complex new risk class.”
The complete White Paper can be downloaded here.