Totus Re urges the UK government and insurance industry to consider the whole panoply of perils catalogued by the National Risk Register rather than focusing solely on pandemic risk. Commercial insurance will only ever be able to support a small, societally sub-optimal sliver of the risks on the National Risk Register, resulting in a ‘Society Insurance Gap’.
These perils range from emerging cyber risks to the risks associated with extreme natural hazards and climate change, rightly considered ‘uninsurable’ in the tail, but partially insurable if equitably supported by the state.
Totus Re is aiming to make a specific intervention in our industry’s response. Namely, to advocate for a public-private arrangement which addresses chronic underinsurance and low resilience against a range of catastrophic perils in the UK, rather than the isolated symptom – the risk from pandemics – from which we are all currently reeling.
Co-Founder Liz Foster says: “Thinking about pandemic risk as part of a broader universe of systemic risks facing society is not to say that Covid-19 does not present urgent and unprecedented challenges.
“As such, we are wholly supportive of the ‘Pandemic Re’ steering group established by Stephen Catlin. We are encouraged by the prospect of the industry uniting behind a single proposal to bring to government.
“Broadly, our aims are complementary: a partnership with the state to enable (re)insurers to viably ensure that the products businesses will need to successfully weather the next national crisis, are available and affordable.”
There is no doubt that the next catastrophic hit to the UK economy and society in general will be a cyber virus that effectively denies millions of users access to the web, while much of their personal data – and money – is downloaded and transferred elsewhere. It really is a question of when, and how many people are affected, not if.
In an era when so many everyday transactions and processes are being hurriedly transferred online, including many within the badly managed public sector, the risk is definitely there – and growing. The potential damage that could arise after State-backed cyber attacks on the NHS, emergency services, power stations, water supply etc is huge – far greater than the reported 50,000 deaths from Covid-19.
Totus Re makes a valid point about the government not being focused on cyber, and other serious risks. The MSM is also obsessed with Covid-19 and grievance culture wars, very few mainstream news channels seem able to do anything beyond getting Martin Lewis on to suggest changing your password and not clicking on any old email. Everyone in the specialist insurance, IT and technology press needs to step up and talk about organised cyber attacks in detail, communicate the very real danger to our modern way of life, and offer some workable solutions, to the wider public.