Warning: Cyber Will Soon Cost Insurers More Than Natural Disasters

By and William Horobin | May 12, 2019

  • May 13, 2019 at 10:46 am
    Augustine says:
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    This is patently obvious… The Equifax hack should have been what tipped everyone off. A catastrophic cyber attack has more reach than any natural phenomenon ever could. Equifax literally involved almost 50% of the entire US population. It was so widespread that Equifax didn’t even have the capacity or ability to accurately determine how many were affected.

    • May 13, 2019 at 1:46 pm
      Captain Planet says:
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      Exactly! Cyber attacks transcend separation of risk.

    • May 14, 2019 at 7:08 am
      CL PM says:
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      Augustine – Not saying I disagree with you – I just don’t know enough – but if the Equifax breach was so large, and 50% of American’s were involved, how were those people impacted? Where is the financial loss that approaches the size of losses from natural disasters? My read of this article is a lot of scary hyperbole, but very few facts or real examples. I’m trying to understand what will happen that is larger than the natural disaster risk.

      • May 14, 2019 at 10:51 am
        Rosenblatt says:
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        To CL PM’s point — my information was part of the Equifax hack; however, nobody has ever tried to steal my identity, open lines of credit for themselves, make purchases under my name, etc.

        While my data was hacked, I suffered $00.00 in actual losses, unlike people whose homes and cars are damaged via weather-related incidents.

        • May 14, 2019 at 11:06 am
          Augustine says:
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          The truly terrifying part of the Equifax breach was that literally none of the information ended up on the dark web. None of the information was identified to have been sold, traded, or divulged. The thing that makes that terrifying is that because of the previously mentioned facts there is good reason to believe that this was a foreign government obtaining this information. It has been posited that it was used by a country like China to recruit spies, etc. If we are insuring losses which cannot be quantified is that smart? If you don’t really know what the risk is it becomes very difficult to insure…

          • May 14, 2019 at 11:54 am
            Rosenblatt says:
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            “If we are insuring losses which cannot be quantified is that smart?” That’s a big negatory, good buddy! :)

  • May 14, 2019 at 1:54 pm
    cicero says:
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    Can anyone direct me to an example of a carrier actually paying out for a cyber loss? All I can remember is when Zurich denied the NotPetya attack as it was an “act of war”.

    I know very little about cyber policies; anyone got a good resource?

    • May 14, 2019 at 2:57 pm
      CL PM says:
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      Cicero – my company issues Cyber endorsements, but we 100% re-insure them with Hartford Steam Boiler Insurance Co (HSB). This is the same as many other BOP competitors in the market. HSB provided examples of Cyber claims paid – many of them are for ransomware where a hacker is holding a business’ systems hostage until a ransom is paid. They’ve also paid claims on data breaches where the business may need to pay for ID Theft Protection for some period of time if customer information was stolen. This link on the HSB website provides further information: https://www.munichre.com/HSB/cyber-insurance/index.html

  • May 17, 2019 at 5:43 pm
    Craig Cornell says:
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    What a stupid article. If/when the long overdue major earthquake hits California, the cost is going to dwarf any natural disaster to date. While most homeowners don’t purchase earthquake coverage, many do and so do many, many businesses.

    I can’t see Cyber losses coming anywhere near this. Cyber claims are actually quite frequent and if the losses escalate, so will the premiums over time. Following this, fewer policies will be purchased, while those policies that are purchased will have higher deductibles. Eventually, the exposure will be largely retained by businesses before any massive losses are suffered by insurance companies.



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