Preparing for digital catastrophes: is cyber insurance ready?
Jun 7, 2021 | 12:45 PM - 2:00 PM
Jun 7, 2021 | 12:45 PM - 2:00 PM
Description
Many experts view the growth of the cyber insurance market as driving insured companies to adopt better digital security risk management, and as an effective lever to increase digital security. However, aggregation risk is limiting the development of this market. In 2017, Wannacry and NotPetya showed that a single exploit can affect a large number of victims simultaneously and globally. The cost of such systemic incidents, or so-called “digital catastrophes”, could exceed the capacity of insurers, potentially leading to their insolvency. Unlike for natural disasters, it is difficult to model digital catastrophes and to anticipate their frequency and magnitude. An international dialogue between digital security and insurance experts is necessary to better understand cyber aggregation risk.
This session will bring together digital security, (re)insurance, and risk modelling experts to address the following questions:
• Are there lessons to be learned from other catastrophes such as the global COVID-19 crisis?
• From an insurance perspective, why are digital catastrophes different from other disasters? Why are digital catastrophes difficult to model? Would more data be sufficient to overcome the aggregation risk?
• What type of systemic events could create such digital catastrophes? What could the magnitude and frequency of such digital catastrophes be in our increasingly digitalised and interdependent economies?
• How can governments help address this limit of the insurance market? What can the digital security community do?
