Insurance Day is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call UK support +44 (0)20 3377 3996 / APAC support at +65 6508 2430

Printed By

UsernamePublicRestriction

Russia-Ukraine war 'to drive up cyber claims'

But losses expected to remain manageable, thanks to better underwriting and reduced limits, rating agency says

Russia’s invasion of Ukraine is likely to drive up cyber claims for European and North American re/insurers, according to rating agency DBRS Morningstar.

Western governments have confirmed the number of cyber attacks has materially increased following Russia’s invasion of Ukraine and the recent tightening of economic and political sanctions on Russia.

Most cyber incidents so far have been relatively basic distributed denial-of-service (DDoS) attacks on both sides of the conflict, DBRS noted.

But state-sponsored and proxy attacks will become more sophisticated in the coming weeks, according to cybersecurity experts and government agencies, potentially affecting physical and financial infrastructure in most countries.

Carriers are seen as unlikely to be able to rely on war exclusions to deny claims. Although acts of war tend to be excluded from insurance policies, including cyber policies, attribution can be very difficult to determine.

To deny a cyber-related claim in this context, insurance and reinsurance companies would need to demonstrate beyond reasonable doubt the claim is not related to a state-sponsored attack or performed by a group acting as a proxy of a belligerent government, DBRS said.

However, given the increasing sophistication of cyber insurance underwriting, reduced limits and capacity, and the relatively low participation of cyber insurance products in overall portfolios, DBRS expects losses from cyber claims to remain manageable for insurers and reinsurers.

Because of an increase in loss ratios over recent years, the cyber insurance market has experienced very significant hardening.

The level of portfolio increases last year varied between 35% and 113% and it is likely the same rates will continue to be imposed this year, according to broker Gallagher Re. 

DBRS expects gross written premiums in cyber to reach $20bn by 2025, up from about $8.9bn in 2021.

Topics

UsernamePublicRestriction

Register

ID1140078

Ask The Analyst

Ask The Analyst - Ask Your Question Send your question to our team of expert analysts. You can: • Ask for background information on/explanation of articles in Insurance Day * • Find out more about our views on industry developments • Ask for an interpretation of market trends • Source supplementary data relating to articles • Request explanations to further your understanding of current issues (* This relates to any Insurance Day that is included as part of your subscription) We will do the research and get back to you personally with the information you need.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel