Successful growth of the cyber insurance industry requires deeper partnerships across the value chain - CyberCube
The reinsurance value chain will work together with insurance-linked securities (ILS) fund managers to bring new cyber reinsurance capacity to this market in 2023, according to the CEO of CyberCube.
Pascal Millaire claims cyber insurance has the potential to become one of the largest lines in the Property & Casualty (P&C) insurance industry in the decades to come. However, this will only occur if there is a deep partnership across the value chain with a cross-section of industry participants.
“The insurance industry will work together in many different ways to help power the evolution of the cyber insurance market toward a more mature level, and deliver better value for the end customer,” he said.
“In the coming year, underwriters and brokers will come under greater pressure to concentrate on value-added tasks, rather than spend their time on manual data entry or low-value screening. The insurance community will also strengthen its ties with alternative capital providers to facilitate the growth of the ILS market.”
P&C transitions to PC&C
According to Millaire and other CyberCube experts, cyber offerings will continue to mature, as the insurance market transitions from P&C to Property, Casualty & Cyber (PC&C).
The wide-ranging predictions touch upon where we are in the underwriting cycle, how Artificial Intelligence (AI) will increasingly be used, and the role of regulation and partnerships in the development of the cyber insurance market.
Admiral Michael Rogers, former director of the NSA and Commander of US Cyber Command who is on CyberCube’s board of directors, called on insurers to focus on how digitisation can create supply chain issues in 2023.
He said: “Our economic models and social structures are increasingly built around this idea of instantaneous connectivity that is never disrupted, which gives us bandwidth, connectivity, and stability. What will it mean if we continue to build this digitised world and yet its security and its capacity aren’t always there?”
Other contributors to the report include board members Matthias Weber, former group chief underwriting officer and member of the Group Executive Committee of Swiss Re, and Michael Millette, managing partner at Hudson Structured Capital Management Ltd.