SAN FRANCISCO—If the headline sounds like a title to a horror movie, that may be appropriate because according to panelists here at Advisen’s Cyber Risk Insights Conference, detecting “silent” cyber coverage risks is a nightmare.
Due to an increasingly complex interconnected world, the potential for a cataclysmic cyber event cascading across multiple lines of coverage casts a shadow over the industry.
The issue is “far more of a concern than affirmative cyber [coverage] we underwrite and price,” said Brad Gow, senior vice president at Endurance. “We’re talking about legacy lines of business drafted far before this was a concern. With the Internet of Things, the attack surface grows exponentially.”
Kara Owens, vice president at Trans Re, said the reinsurer is taking a very close look at underwriting throughout the world and has found that “a lot of treaty wordings do not address cyber.” The organization is attempting to get a better grasp of accumulation potential by running proof-of-concept scenarios of “clash events” and then examining policies to determine if cyber is included, how it was priced, and whether aggregation risk could be a problem.