GI Asia International Working Party are reporting on a Cyber risk event at which they presented.
As a working party, we’ve been giving thought to how, in practice, we would approach challenges that actuaries face on cyber risk. These may be reserving for a silent cyber loss, pricing a cyber extension or managing cyber exposures.
In these scenarios, we would reach out to our legal, underwriting, claims and broking colleagues with questions to guide our thinking. In particular in Asia where the cyber market is still developing, not many actuaries have access to the relevant expertise in-house.
Thus on 19 Oct, Chiew Yee Ng, on behalf of the working group, hosted a discussion with Peter Cashin (Partner, Kennedy’s Law) and Allan Learoyd (SVP Underwriting, Peak Re).
This was the closing panel discussion ‘Making Sense of Cyber Risk’, at Actuarial Society of Hong Kong’s biennial General Insurance Seminar.
We discussed the silent losses from NotPetya, how terms and conditions of cyber cover have changed/will change (including drawing parallels to Y2K), whether data liability regulations in Asia/HK have kept pace with digitalisation and what this means for claims from cyber perils.
Building on comments from the audience, we concluded that a major reason for the low takeup of cyber cover in Asia is the lack of clarity over the value from purchasing cyber insurance, not just in terms of financial indemnity but also as a crisis response tool, given the diversity of products in the market.
We believe that beyond regulatory developments, these levers could drive market maturity and scale: (i) development of an event definition to support XOL reinsurance coverage (ii) broadening of wordings to include coverage for business interruption, reputational damage and costs of an expert incident management panel (iii) new methods of distribution e.g. partnerships with cybersecurity firms
We look forward to hosting further sessions on cyber insurance in Asia in the coming months.