Many in the industry will have heard about the proclamation towards the end of last year by Zurich chief executive Mario Greco that cyber attacks could become uninsurable as their size and frequency continue to grow.
Mr Greco said to the Financial Times, “What will become uninsurable is going to be cyber. What if someone takes control of vital parts of our infrastructure, the consequences of that?”
Indeed, his comments echo those that some other industry leaders have expressed in recent years that largely concern the scale and unpredictability of cyber – and the potential for cyber incidents to become systemically threatening.
The insurance industry is beginning to realise that, as with health insurance, the future of cyber insurance will rely more on prevention and less on after-the-fact remediation.
Buyers of cyber insurance should be enticed by the prospect of lower premiums if they reduce their cyber-risk profile. The opportunity for Middle East insurers to form alliances with cyber technology whizz kids in order to create a truly useful (and affordable) set of products to offer their clients would be hard to overestimate.
Almost every analysis published on the cyber crime sector suggests that the volume, frequency and scale of hacks and other malicious activities are only going to increase in the coming years. This could be seen as a growing headache for both corporates and their insurer of choice – or it could be seen as an opportunity for insurers to get ahead of the curve and offer sector-leading products.
Doing this would require using the best resources available and these resources might be found anywhere on earth these days. Cyber has no geographic limitations – and the same applies to cyber solutions.
There is little doubt that the health insurance sector has been completely transformed by the arrival of programmes such as Discovery Vitality – that aim to change customer behaviour by encouraging them to adopt more healthy lifestyles.
The cyber insurance sector in the MENA region could do with a Vitality for cyber – encouraging customers to get smarter about cyber threats, better at spotting suspicious activity and boosting encryption and security.
As AI becomes more firmly entrenched in everyday business – through chat generative pre-trained transformers like ChatGPT and Bard – it seems likely the insurance industry will look for applications to save costs and enhance services.
There might even come a time when a sophisticated AI can reliably handle claims and other customer interactions once reserved for ‘the human touch’ – although perhaps pricing of policies and underwriting by AI may still be some way off.
While there is much talk about the insurance sector helping customers and clients deal with cyber attacks, there is less attention given to such attacks on insurance companies and their systems.
While insurance operators may not be as exposed as retail banks to losing clients’ money through sophisticated hacks, they still need to be seen to doing their utmost to guard against nefarious infiltrations of their systems.
Paul McNamara
Editorial director
Middle East Insurance Review