Insurance giants push for state backing to protect against cyber threats

TLDR:

• Major insurers Marsh McLennan and Zurich are urging state support for ‘uninsurable’ cyber risks.
• They propose creating public-private partnerships to address the protection gap in cyber insurance.

In an unprecedented move, major insurers Marsh McLennan and Zurich Insurance Group have released a whitepaper calling for government support to secure cyber risk. Comparing cyber attacks to terrorism and flooding, the insurers argue that some cyber incidents are ‘uninsurable’ and require collective action to bridge the protection gap. The recent CrowdStrike IT outage serves as a stark reminder of the far-reaching consequences of cyber incidents, affecting multiple businesses and essential services across countries.

The whitepaper proposes creating public-private partnerships to share losses from currently ‘uninsurable’ events and suggests establishing a common framework for data sharing and collaboration between the insurance industry and public sector. While the cyber insurance market continues to grow, with London-based insurer Beazley leading the global market, Marsh McLennan and Zurich emphasize the need for innovative solutions and greater public sector involvement. The call for public-private partnerships reflects a recognition that traditional insurance models may not be enough to address the unique challenges posed by cyber risks.

As the cyber threat landscape evolves, insurers believe that approaches to managing and insuring against these risks must also evolve. The Biden administration’s recognition of cyber threats to critical infrastructure and actions to secure them indicate a growing awareness of the importance of cybersecurity in government. Collaborative efforts between the public and private sectors will be crucial in addressing the challenges posed by cyber risks and ensuring a secure digital future.