Next global cyberattack could cost insurers billions

Cyber crime insurers largely avoided costly claims from the recent attacks that hit businesses around the globe but the next global virus could change that, a leading global insurer has warned.

“It’s exceptionally likely we will see an event over the next months that will seriously affect insurers.

It would only need a combination of WannaCry’s wide reach and Petya’s destructive force to cost cyber insurers something like $2.5bn (€2.2bn), or a full year of gross premium income in the market,” Graeme Newman, chief innovation officer at CFC Underwriting, said.

Maker of consumer goods such as Dettol, Nurofen and Durex, Reckitt Benckiser cut its full-year sales forecast after a global cyberattack last month disrupted manufacturing and distribution. It was the first detailed indication of the financial toll by a major company.

Danish shipping giant Moller-Maersk, which had to shut down systems across its operations to contain the cyberattack, said it’s too early to predict the impact on its results.

Hackers may develop even more dangerous tools after attacks such as the WannaCry virus in May and the Petya attack that wreaked havoc in June. Those events didn’t result in meaningful insurance claims because they didn’t affect many companies in the US, where more than 90% of the cyber insurance market is located, Mr Newman said.

CFC underwrites approximately $100m (€87.6m) of cyber-insurance premiums, making it one of Europe’s biggest sellers of the product.

The global market for cyber insurance grew to about $3.4bn (€2.98bn) in premiums last year and could rise to between to almost $10bn (€8.8bn) by 2020, reinsurer Munich Re estimates.

Bloomberg