Howden Re publishes report on cyber reinsurance market | Insurance business America
It calls for a change in the approach to cyber exposure management
reinsurance
By Abigail Adriatico
Howden Re, the reinsurance and risk advisory arm of Howden Group, has published a report on the cyber reinsurance landscape.
In its report, “Re-framing cyber risk: Navigating Threats and Embapping Opportunities,” the company found that the benefits offered were typically underestimated compared to exposure to a natural disaster.
“Cyber risks are always at the top of risk managers’ concerns. To remain relevant to these insurance buyers, it is imperative as an industry that we embrace this class of business,” said Luke Foord-Kelcey, Global Head of Cyber at Howden Re.
“This report shows how network operators can assess their interest in the cyber industry to ensure they understand the scale of the opportunities in the context of a more thorough understanding of the risks.”
The report found that for larger airlines, the risk of natural disasters is disproportionate to cyber risk. Cedants with smaller balance sheets were more exposed to cyber risks relative to their business mix.
“The maturation of the cyber market requires a careful rethinking of how cyber risks are covered. A transition is needed: from viewing cyber threats from a catastrophic perspective to recognizing the competitive advantage that can be achieved through more nuanced and informed risk analysis,” said David Flandro, head of industry analysis and strategic consulting at Howden Re.
In the report, Howden Re concluded that reinsurers can achieve a more favorable and diversified risk-return profile through cyber reinsurance underwriting with continued investment in expertise, modeling and analysis.
“Investing in cyber-specific expertise and leveraging refined risk models are key to effectively managing the complexity of cyber threats,” said Foord-Kelcey.
“This approach will not only turn perceived vulnerabilities into competitive advantages, but also enable our customers to take full advantage of the emerging opportunities in today’s digital landscape.”
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2024-05-10 15:00:00
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