IUA FORMS NEW CYBER REINSURANCE GROUP FOR LONDON COMPANY MARKET
A new cyber group dedicated specifically to considering the concerns of reinsurers has been established by the International Underwriting Association. The move follows a growing interest amongst reinsurance practitioners in the activities of the association’s existing Cyber Underwriting Group. This committee is run for underwriters offering standalone cyber policies and is made up largely of carriers providing direct cover.
Reinsurers often have a slightly different focus and interest with regard to cyber coverage and so a separate group has been formed. Already 14 member companies are represented on the new committee which held its first meeting yesterday (22 May 2018).
The opening objective was to establish the scope of future discussions. These are expected to cover issues such as the impact of cyber war and terrorism risks; accumulation and aggregation of risk; the provision of cyber cover within traditional classes of business and natural perils as potential triggers for cyber events. Consideration will also be given to areas of potential overlap or gaps between product liability and errors and ommissions policies.
Chris Jones, IUA director of legal and market services, said: “The rapid growth and fast-changing nature of cyber threats have created many challenges for reinsurers.
“Companies are keen to support the development of dedicated cyber products in the London Market and our new reinsurance groups aims to encourage this through discussion of both underwriting and claims issues. It will also be looking to represent members’ interests on any regulatory developments relevant to the sector and may consider new market policy wordings.”
“The definition of cyber risks to be covered by the committee is quite broad and covers privacy and data protection, damage to intangible assets such as reputation and technology related errors and omissions. It also includes both physical damage arising from the misuse of information technology and non-physical damage arising, for example, from business interruption.”
The IUA Cyber Reinsurance Committee is due to convene every second month with its next meeting scheduled for the end of July.
In January this year the IUA’s existing Cyber Underwriting Group published a report calling for a registry system that collects and shares statistical information on the cost and frequency of cyber losses and claims across Europe. The Cyber Positions Paper also highlighted the need for national authorities to help raise awareness of potential liabilities. Copies of the document are available to download from the IUA website (https://www.iua.co.uk/IUA_Member/Press/.Press_Releases_2018/IUA_cyber_group_calls_for_registry_of_claims_data.aspx).