The chief executive of one of Europe’s biggest insurers has warned that cyber attacks, rather than natural catastrophes, will become uninsurable as disruption from hacks continues to grow.
Insurance executives have become more vocal about systemic risks, such as pandemics and climate change, that have tested the sector’s ability to provide coverage in recent years. As a result, for the second year in a row, natural catastrophe-related claims are expected to top $100bn.
But Mario Greco, chief executive at insurer Zurich, told the Financial Times that cyber was a risk to watch.
«First off, there must be a perception that this is not just data . . . This is about civilisation. These people can severely disrupt our lives».
Spiralling cyber losses have prompted emergency measures by underwriters to limit exposure. As well as pushing up prices, some insurers have responded by tweaking policies so that clients retain more losses. In addition, there are exemptions written into policies for certain types of attacks.
At the time, Lloyd’s executive said the move was «responsible» and preferable to waiting until «after everything has gone wrong».
But the difficulty of identifying those behind attacks and their affiliations makes such exemptions legally fraught. Moreover, cyber experts have warned that rising prices and more extensive exceptions could put people off buying any protection.
Greco said there was a limit to how much the private sector could absorb underwriting all the losses from cyber attacks. He called on governments to «set up private-public schemes to handle systemic cyber risks that can’t be quantified, similar to those in some jurisdictions for earthquakes or terror attacks».
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