Reinsurer Creates Cyber Eco-system to Meet Risk Challenge

Munich Re has said it wants to lead the reinsurance world in the response to the growing demand for cyber risk cover and products.

Speaking in Monte Carlo, Torsten Jeworrek, Member of the group’s Board of Management, said the world’s digital transformation was changing the risk landscape and with it demanding new solutions from underwriters.

As such Munich Re said it accepts the world’s cyber challenge and had an “active appetite for taking risks and driving innovation”.

He added that cyber has been identified as one of the reinsurer’s main strategic growth areas.

He said the prediction was for the cyber market to grow year on year by between 25% and 30%.

Last year cyber cover accounted for $473 million of Munich Re’s premium volume.

However, Mr Jeworrek said the company and the industry simply could not stand still given the rising demand from its clients.

“We have a number of threats that the industry is now being challenged to provide covers for. We are being asked to invent new solutions to support the client.

“There are areas such as climate change which are in the spotlight for our clients and as such we as an industry have to deliver.”

One of those risks is cyber and with it the demand for cover.

“Cyber insurance is still a small segment of our business but as we have seen the number of attacks are growing and as such it is creating a demand from our clients,” he added. “But it is not simply only a problem for the companies that have suffered an attack, their partners are also affected.

“They are interlinked and as such they will be impacted. There is little doubt that cyber demand will increase in the future.”

New technologies such as the implementation of the 5G mobile network will lead to more connectivity and with it a greater exposure to risk.

Mr Jeworrek added that governments, regulators and company shareholders were asking firms how well they were prepared and protected again cyber-attack.

Therefore the industry could no simply react with a simple cover and as such Munich Re was keen to deliver much more than the policy itself.

“We want to offer the full spectrum of services,” he said. “We need to go above and beyond a single policy. There needs to be advice, steps on prevention, and modelling.”

Munich Re said it was creating an eco-system in which it will partner with a range of experts to offer a broader solution which includes firms with contacts with government intelligence services in order to identify threats.

“It will be an integrated approach,” he added.