Gallagher Re Publishes White Paper on Cyber Virus Threat

‘Silent’ virus coverage must be tackled as a priority by the (re)insurance industry, whether the virus in question is computer-generated ransomware or a global pandemic. That is the biggest lesson to be learned from comparing these two types of virus that in many ways have come to define the year 2020, according to a new white paper from Gallagher Re – the specialist reinsurance broker.

“Non-affirmative exposure in general is a vulnerability that itself needs to be patched,” said Jennifer Braney, Consultancy Lead & Cyber Broker at Gallagher Re. “This is not just important in its own right – non-affirmative exposure causes uncertainty for clients, reputational damage for the insurance industry, and costs through delays in claims disputes and settlements.

“But the market should also see the challenge of dealing with virus risk in its totality as an opportunity as much as a threat. In doing so, these efforts may ultimately lead to not only more effective risk transfer through increased insurance penetration, clarity of coverage and more effective products, but ideally a more manageable risk with a lower economic loss as the vulnerabilities that are exploited by viruses are addressed.”

Jennifer continued: “This is achievable by tackling non-affirmative virus coverage, wherever that emerges, and growing standalone classes that provide this coverage explicitly. With growth comes a more substantial premium base, which can support investment in resource. This investment leads to a heightened understanding of exposure and knowledge-sharing, which supports a growth in capacity,  which expands the premium pot and thus both reduces the protection gap for businesses while enabling the (re)insurance industry to better withstand the loss events when they arise.”

Ian Newman, Global Head of Cyber at Gallagher Re, added: “This year, ransomware and COVID-19 combined to provide, in many cases, a one-two punch to businesses as well as the public sector. Our paper presents a comparison of these two phenomenon that, in their own ways, have defined the year 2020 and demonstrates that, in the face of uncertainty, there remain at least opportunities to learn and overcome.

“There are valuable lessons to be learnt in questioning and engaging with what is unknown to us and outside our ‘normal’ practice areas. Indeed, these two virus events – one man-made and one nature’s design – clearly demand proaction and present an opportunity for the (re)insurance market to do what it can do best.”

Download the white paper hereWe hope it will encourage and engage positive market dialogues and we would welcome your views.

About alastair walker 11417 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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