Big names proposing cyber insurance backstop
Big names proposing cyber insurance backstop | Insurance Business Australia
Insurance News
Big names proposing cyber insurance backstop
Governments urged to support private sector in absorbing losses
Insurance News
By
Terry Gangcuangco
Big insurance names Zurich and Marsh are urging governments to provide state backing to help mitigate cyber risks.
In a joint report, the two companies cited limitations in the amount of losses that can be insured by the private sector, especially with the possibility of a massive hit in the event of a major cyber incident impacting infrastructure.
According to the Financial Times, one recommendation by Zurich and Marsh is the creation of loss-sharing schemes already seen in areas like flood and terrorism. It was highlighted that such public-private collaborations can help cover cyber risks that are deemed uninsurable.
The proposal comes amid Zurich and Marsh’s finding that the ability of traditional insurance and risk management approaches to fully mitigate cyber threats is being outpaced by the risks.
For Zurich commercial insurance CEO Sierra Signorelli, securing government support means “more certainty for the coverage,” with particular losses being absorbed by the public sector in addition to what is covered by insurers.
In Canada, while cyber liability premiums have surged from an estimated CA$18 million in 2015 to around CA$550 million in 2023, company financial results suggest that claims are outstripping premium growth.
According to the Insurance Bureau of Canada, insurers had a combined ratio averaging 153% from 2019 to 2023, meaning they paid out CA$1.53 in claims and operating expenses for every dollar earned in premiums.
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