Capsicum Re, the specialist reinsurance broker, is today launching its report ‘Addressing Non-Affirmative Cyber’. The report looks at the growing problem of cyber perils that are neither explicity included nor excluded, leaving insureds potentially exposed to a lack of cover and the insurance industry with significant unquantified exposures.
The report highlights four factors that are changing the dynamics in the cyber insurance market:
- Increasing regulatory pressure
- Increased frequency of cyber attacks
- Lack of uniform implemention of cyber exclusions
- Possible changes in reinsurer risk appetite for cyber, following recent severe nat cat losses
It is uncertain how these factors might change the market, however as underwriters understand cyber risks better, there may be a step change in underwriting expertise, a trend that may accelerate if cyber underwriting transitions to specialists under stand-alone policies. The report also suggests it is possible that nothing will happen, leaving the uncertainties and unquantified exposures to increase to dangerous levels.
The report considers several affirmative insurance solutions, such as Brit Cyber Attack Plus, then focuses on reinsurance solutions to address this problem. Capsicum Re identifies that reinsurers are responding with both non-affirmative solutions, such as Capsicum Re’s own Cyclone net retention product, and affirmative solutions that include stop loss policies.
Ian Newman, global head of cyber at Capsicum Re, said: “In the face of increasing regulatory pressure, frequency of large cyber-attacks, and a potential macro shift in market dynamics, we have put together this important market report to highlight the growing threat of non-affirmative cyber. It has created exposures that our industry must address in a meaningful way, and I am confident that the ingenuity and expertise does exist to create effective (re)insurance solutions – at Capsicum Re, we have already launched solutions. I encourage those who would like to contribute to delivering comprehensive solutions to read our report.”
For a copy of the report please click here.
For further information, please contact:
Rupert Swallow – CEO
+44 (0)207 234 4075