Insurers are in for higher cyber-related losses over the next 12 months, due to increasing reliance on technology and high-profile cyberattacks, a survey by Willis Re has found.
More than six in 10 (60%) of the almost 700 respondents of the 2018 Silent Cyber Risk Outlook global survey said that it is likely to incur more than one cyber related loss for every hundred non-cyber covered losses over the next 12 months in all lines of business, apart from workers compensation. In last year’s survey less than 50% of respondents agreed to this statement about any line of business.
Large cyberattacks, like WannaCry or NotPetya, are also expected to be more frequent, with over 60% of respondents stating they anticipate these occurring at least once every five years, Willis Re said.
The survey revealed that the IT/utilities/telecommunications industry group has the highest perceived property silent cyber risk factor, with 42% of respondents reporting they are likely to incur 10 or more cyber-related losses for every hundred non-cyber covered losses.
“The insurance market considers ‘silent cyber’, or cyber-related losses under policies where cyber risk isn’t specifically included, to be a far greater risk than ever before,” said Anthony Dagostino, global head of cyber risk solutions at Willis Towers Watson. “The 2017 WannaCry and NotPetya attacks highlighted this risk and potential damage across all business areas – causing significant concern around silent cyber. This increased risk perception has highlighted the need for specific cyber coverage, but competitive market conditions are limiting the scope for coverage or pricing adjustments to be made in other lines of business.”
“The recent cyber event in Singapore on the healthcare institutions struck close to home,” said Mark Morley, Willis Re’s managing director for Asia-Pacific. “Asian insurers need to be taking action now to ensure they have coverage that will protect themselves and their clients’ data. With increasing cyberattacks globally, this is not only an issue on affirmative cyber insurance covers but also a risk on other lines of business.”
The survey polled close to 700 participants from over 100 global insurance and reinsurance companies, across five business lines: first party property, other liability (including auto), workers’ compensation, errors and omissions (E&O), and directors and officers (D&O).