European insurers debate the evolution of cyber insurance

LONDON – The cyber insurance market has come to a crossroad, as the industry debates the best path for the evolving coverage based on the demands of insureds and the risk appetite of insurers, according to panelists speaking during Advisen’s Cyber Risk Insights Conference, held last week in London.

 What should a cyber insurance policy look like in the future? During several lively discussions, industry experts addressed whether cyber insurance meets the needs of organizations and how potential property damage arising out of cyber events should be covered. Speakers during the Advisen event clearly differed in their views on the next steps for the coverage, but most agreed that cyber has a long way to go in its journey.

 As exclusions for cyber-related events in traditional insurance policies have appeared, so too has the expectation that the cyber market will develop products to address the exposure. However, it may be risk to assume that the cyber insurance market must respond to any loss event connected to hacking, cybercrime, or system failure, according to industry experts.

 The result would be an “unwieldy product,” said Stephen Wares, cyber risk practice leader for Marsh’s European, Middle East, and Africa (EMEA) office. Several speakers indicated that aggregation issues would overwhelm the market’s capacity if insurers are called upon to take on too much risk.

 “The way we’re feeling our way through, it’s a hatchet walk through a twisted forest, with people figuring out the best way to go,” said Michael Schmitt, vice president and senior underwriter for cyber and technology at Swiss Re. “Is it going to be another 10 years of figuring out which underwriter, which coverage should respond?”

 This story in an excerpt of the original. The content originally appeared in Cyber Front Page News. To read the whole story, you must be a subscriber. Subscribe now.