Cyber risk is soon going to be the biggest insurance risk of them all.
At least that’s the opinion of the P&C reinsurance firm Scor. Company chairman and CEO Denis Kessler said cyber is going to replace natural disasters for the highest payouts. He suggests developing a comprehensive and common global scale to define the damages from a cyber attack.
Kessler made the comments at a conference on cybersecurity held by the Bank of France.
“I dream of a kind of Richter scale for cyber security,” he said. “It would be very helpful to have measurement and modeling tools. Unless we can model, it’s very difficult for us to provide coverage. We have scenarios but not modeling tools.”
Kessler said the cost of cyber risks — to date — has been relatively small but it will grow in the future. And grow a lot. The attendees members of the U.S. Federal Reserve and representatives of banks in Europe, Canada and Japan. They all agreed and also agreed that the losses in the future could top $600 billion a year.
That compares to $250 billion presently spent on natural disaster claims.
“The demand for cyber risk coverage well exceeds the supply and this is an issue,” Kessler said and he called for a rebalance, and for more coordination and partnering with authorities “to build databases and a taxonomy to share information.”
During the conference it was determined that the Group of Seven will simulate a border-wide crisis net month. The point is to learn as much as can be learned from the crisis and how to react.
ECB Executive Board Member Sabine Lautenschlaeger asked the financial institutions attending to review their information infrastructures and conduct stress tests and joint exercises.
The point is to improve resilience.
Source link: Insurance Journal