This Long Finance research project sought to explore how cyber-catastrophe reinsurance might help mitigate cyber-risk, establish some evidence of the appetite for such reinsurance, and examine how government might best provide support for the establishment of an efficient free market solution.
Co-sponsored by APM Group, the report explores the nature of cyber-risk and the role of cyber insurance and reinsurance as a risk mitigation tool with a focus on cyber-catastrophe events that is cyber events that could seriously affect the economy. The report explores how a public-private cyber-catastrophe reinsurance scheme could help secure ICT-based prosperity in the UK by helping insurers insure themselves to insure others. The scheme would provide cover to a group of insurers above a catastrophic loss threshold, in effect a pool funded by the insurance industry. The UK government’s role would be one of promotion and (possibly) a last resort insurer only in the event that industry retentions and the scheme’s reserves have been exhausted. In all likelihood, the UK government would be a last resort insurer anyway but in this was it would benefit from a buffer much deeper than the one it enjoys today.
Long Finance engaged key stakeholders including insurance experts and professionals (including existing cyber underwriters and specialist brokers), reinsurance professionals, other financial services firms (e.g. major exchanges or fintech firms), providers of cyber-protection services, law and accountancy firms and government through over 80 semi-structured interviews, a round-table and a webinar.