A systemic cyber disaster may create losses that exceed the insurance coverage trade’s scope of protection attributable to potential aggregations of threat, specialists mentioned.
One main problem is the rising utilization of cloud computing amongst policyholders, which may assist result in unexpected aggregations of threat, in accordance with a panel of senior insurance coverage trade executives talking Friday at New York University at a convention organized by the U.S. Department of the Treasury and NYU.
The panel was a part of a wider dialogue on the deserves of any potential federal participation within the cyber insurance coverage market or response to a cyber disaster.
“Some risks are so severe that private industry alone is not able to manage the potential losses,” mentioned John Doyle, CEO at Marsh & McLennan Cos. Inc.
“There isn’t enough industry capacity today to fully cover a true catastrophic event,” mentioned Albert Benchimol, former CEO at Axis Capital Holdings Ltd., including that threat aggregations are among the many chief issues about cyber exposures.
The rising use of cloud computing “can create exposures across broad swaths of our customers,” mentioned Jim Williamson, group chief working officer and head of reinsurance at Everest Global, probably resulting in a stage of loss “we perhaps didn’t contemplate.”
John Keogh, president and COO at Chubb Group Ltd., agreed aggregations of threat are a significant concern surrounding cyber coverages, particularly since cyber exposures are rising regularly. “It’s getting worse by the day. It’s going to be worse a year from now than at the moment,” he mentioned.