2018 is the second year that ICMIF Supporting Member Willis Re has carried out a market survey about silent cyber exposure — potential cyber-related losses due to silent coverage under insurance policies not specifically designed to cover cyber risk.
Findings from the 2018 Silent Cyber Risk Outlook show that insurance companies expect increased cyber-related losses across all business lines over the course of the next year, driven by increasing reliance on technology and high-profile cyber-attacks.
Since the 2017 survey, there have been some headline silent cyber losses in lines as diverse as property, marine, and directors and officers (D&O) arising out of events such as the NotPetya malware attack and the Equifax data breach. The 2018 survey looks at how these events, and an increased awareness of the potential for silent cyber losses, have affected market perceptions?
In 2018, the Willis Re survey sample comprised close to 700 participants from over 100 insurance companies and groups around the world as well as a number of Willis Towers Watson employees. The focus for the survey was five lines of business: first-party property, other liability (which this year incorporated auto), workers compensation (all of which were included in 2017), and two new lines — errors and omissions (E&O) and D&O.
In addition, this year questions were also asked about large cyber loss events, exploring the extent to which respondents think the specified lines of business are correlated in the event of a large cyber event (1:100 or worse) and what return periods respondents would attach to a series of recent cyber events, including NotPetya and Equifax.
Respondents to the survey stated that they believed large cyber-attacks, like WannaCry or NotPetya, will be more frequent in the future, with over 60% say they can see these happening at least once every five years.
A total of 42% of respondents reported they are likely to incur 10 or more cyber-related loss for every hundred non-cyber covered losses.
Mark Synnott, Global Cyber Leader, Willis Re, said: "Willis Re is at the forefront of helping clients assess aggregation risk to silent cyber exposure through our annual silent cyber survey, which we have built into our portfolio analytics. We also have a market-tested reinsurance solution to mitigate this risk – CASTL, a cyber aggregate stop loss that covers all forms of affirmative and silent cyber exposure."
Anthony Dagostino, Global Head of Cyber Risk Solutions, Willis Towers Watson, said: "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.”
Download the survey here.