Page 36 - Insurance Times January 2018 Sample

THE DEMAND FOR CYBER COVER WILL BE QUITE RAPID
WITH GREATER PENETRATIONS LOCALLY WITHIN MARKETS
AS WELL AS GLOBALLY.

Underwriters have to closely understand requirements of
Corporate Clients, analyses their board room decisions and
invent cyber Risk solutions! 'UNDERWRITE CYBER RISK
AFTER FULLY UNDERSTANDING CYBER RISKS'. Risk
Management of Cyber Risk is to be the main area of thrust.

Everyone has to find a way or make a new one to write,
underwrite and reinsure Cyber Risks to satisfy demands of
clients both small and big corporate firms. Cyber Risks is due mainly to rapidly growing Digital
Transformation, 'Widening Resources' and vulnerability from
The traditional competitions in soft market conditions, hyper-connectivity. The entire process of Cyber Risks
increasing frequencies and severities of all Natural evolution is full of newer types of Threats and
Catastrophes and increasing volatility of investment Opportunities.Cyber Risks structures are rapidly changing
environment are all akin to a perfect storm in the face of and are becoming complicated.
disruptions caused by Cyber Risk.
Firms may underestimate the complexity that is created by
Perhaps 'Cyber Terrorism' can be covered only on by the digital technology. This is absolutely and Reinsurance
creation of Market Pool and other Cyber Risks can be Markets.
covered by specialized Insurance Products.
Growing Cyber Risk Market is impacted by newer
Rating Technologies must be evolved and Transfer of Rating technologies, rapid digitalization with global
Technologies to be achieved by a Global Co-operation of interconnectivity.
Reinsurers and Insurers and (Re) Insurance Brokers. Standalone Cyber Insurance is growing in US Market as well
as in U.K. / Europe. The Cyber Insurance Market is
D) Growing Cyber Insurance Market: concentrated. Main players are AIG, Chubb and XL Group.
Real evolution of Cyber Insurance Market has been from 45% of Global Cyber Premium is in U.S.A.
2014 onwards. However, since 2011 Cyber Liability
Insurances with small limits have their beginnings since 2011. Worldwide Cyber Risk PremiumsApproximate
Projections (2015-25)

The Cyber Risk landscape is changing very fast and Insured Figures in US Dollar Billions
business houses as well as Insurers, Reinsurers and
(Re)insurance Brokers have to keep pace with fast changing Sr. Market 2015 2020 2025
Technological Developments. Technological Revolution is No. Participants
closely linked with (Re)insurance Market Evolutions. 1. Allianz 2.50 7.00 20.00
2. AON 2.00 10.00 TBA
First Party losses result from Cyber incidents which include
3. PWC 3.00 7.50 TBA
forensic Investigation costs to determine cause, notifying
consumers and campaigns for public awareness. 4. Advisen 2.50 5.00 TBA
5. ABI 2.00 10.00 TBA
Third Party losses relate to costs of Private litigations or firms Total 12.00 39.50 20.00
and fees.
Cyber Policy Capacity Limits from US$ 5 MLNS to 100 MLNS.
According to Lloyds CEO Cyber Attacks cost companies Source: SIGMA Report 1/2017
around US$ 400 BLNS every year! - SIGMA Report 1/2017
E) Conclusion

Cyber Risks are evolving continually. The dynamic nature of Cyber Risks Insurances are needed by industries Insureds are

36 The Insurance Times, January 2018

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