Capsicum Re, the specialist reinsurance broker, is today launching its report ‘Addressing Non-Affirmative Cyber’. The report looks at the growing problem of cyber perils that are neither explicitly included nor excluded, leaving insureds potentially exposed to a lack of cover and the insurance industry with significant unquantified exposures.
The report highlights four factors that are changing the dynamics in the cyber insurance market:
- Increasing regulatory pressure
- Increased frequency of cyber attacks
- Lack of uniform implementation of cyber exclusions
- Possible changes in reinsurer risk appetite for cyber, following recent severe nat cat losses
It is uncertain how these factors might change the market, however, as underwriters understand cyber risks better, there may be a step change in underwriting expertise, a trend that may accelerate if cyber underwriting transitions to specialists under stand-alone policies. The report also suggests it is possible that nothing will happen, leaving the uncertainties and unquantified exposures to increase to dangerous levels.
The report considers several affirmative insurance solutions, such as Brit Cyber Attack Plus, as well as focuses on reinsurance solutions to address this problem. Capsicum Re identifies that reinsurers are responding with both non-affirmative solutions, such as Capsicum Re’s own Cyclone net retention product, and affirmative solutions that include stop loss policies.
Ian Newman, global head of cyber at Capsicum Re, said: “In the face of increasing regulatory pressure, frequency of large cyber-attacks, and a potential macro shift in market dynamics, we have put together this important market report to highlight the growing threat of non-affirmative cyber. It has created exposures that our industry must address in a meaningful way, and I am confident that the ingenuity and expertise does exist to create effective (re)insurance solutions – at Capsicum Re, we have already started. I encourage those who would like to contribute to delivering comprehensive solutions to read our report.”
For a copy of the report please see the attachment or visit: www.capsicumre.com
For further information, please contact:
Rupert Swallow – CEO
+44 (0)207 234 4075
Notes to editors
About Capsicum Re
Founded by Grahame Chilton and Rupert Swallow in 2013, Capsicum Reinsurance Brokers LLP Group (“Capsicum Re”) is a reinsurance broker working in partnership with Arthur J. Gallagher as its primary treaty reinsurance broking outlet. Based out of offices in London, Bermuda, Rio de Janeiro, Miami and Santiago, Capsicum Re is focused on attracting the best advocates in the market to provide bespoke and specialist reinsurance advice and products; it boasts the foremost broking teams in the specialist areas of the market that it focuses on.