Brian Sims
Editor
Brian Sims
Editor
A NEW White Paper issued by Marsh McLennan, the professional services firm focused on risk and strategy, and Zurich Insurance Group (the global multi-line insurer and provider of resilience services) highlights the “critical need” for greater public sector involvement to strengthen societal resilience in the event that a catastrophic cyber event occurs.
The White Paper, entitled ‘Closing the Cyber Risk Protection Gap’, emphasises the urgent need for innovative solutions to close the gap between risk and insurance – most notably so for SMEs that are often uninsured or otherwise underinsured – as rapidly-evolving cyber threats are outpacing the capacity of traditional insurance and risk management solutions to fully mitigate them.
The detailed document highlights mass malware and mass cloud outage as examples of cyber incidents that are currently considered insurable up to a certain level of financial loss, in addition to events such as critical infrastructure failure, which are generally considered uninsurable.
Severe threat
John Doyle, president and CEO of Marsh McLennan, said: “The severe threat presented by cyber risks requires collective action to bridge the protection gap. The insurance industry and the public sector must fully understand the spectrum of insurable and currently non-insurable cyber events. Through greater collaboration, we can develop innovative solutions, inform insurance buyers, enhance the cyber insurance market and establish robust public-private partnerships that safeguard our society and economy from potentially catastrophic cyber events.”
Mario Greco, Group CEO at the Zurich Insurance Group, added: “The threat of cyber attack poses a significant risk to both societal and economic stability. As insurers, we can offer some degree of protection, but we must acknowledge that large-scale and catastrophic cyber events present substantial accumulation risks that cannot be borne by the private sector alone. On that basis, enhancing cyber resilience is vital for effectively addressing this protection gap. Achieving this requires strong public-private partnerships to develop comprehensive strategies that will secure our digital future.”
Common framework
According to the White Paper, establishing a common framework for data sharing, greater and more meaningful collaboration and innovation between the insurance industry and public sector is required to help tackle this protection gap, strengthen resilience and safeguard societies and economies from the escalating cyber threat landscape.
This not only includes ransomware attacks and threats from bad actors, but also global IT outages and other increasingly interconnected incidents.
The framework would include robust incentives as an alternative to further regulation, methods to measure quantifiable catastrophic cyber risk and strategies designed to manage unquantifiable cyber risk through public-private partnerships.
The White Paper asserts that these measures could help to sustain the broader economy and create capacity for the insurance market to support society against the backdrop of severe financial accumulation risks.
