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PinnacleOne ExecBrief | Are You Actuarially In Good Hands?
- Lloyd’s new cyberattack insurance policies mandate exclusions for state-backed cyberattacks starting from March 2023.
- These exclusions applied to cyberattacks that disrupted essential state functions or security and insurers had to attribute these attacks to specific states.
- Despite some infrastructure operators ignoring government warnings, insurers were acutely aware of the risks with billions of dollars at stake.
- The main issue likely to cause disputes between insurers and policyholders is the attribution of cyberattacks, as the covert nature of cyberattacks makes it difficult to determine state responsibility.
- Additionally, the definition of “major detrimental impact” remains vague, which could lead to disagreements over what qualifies as significant disruption.
- As insurers step away from covering cyber warfare-related risks, the question of responsibility looms.
- Businesses must now contend with a new reality where neither governments nor insurers can fully shield or cover them from nation-state attacks.
- The recent MOVEit, Change Healthcare, and NHS incidents showed how attacks on a single critical software and government service can cascade across the economy, creating systemic aggregate losses.
- A recent report by a cyber insurer noted that the risk of and uncertainty around aggregation continues to hang over the market by impeding capital inflows and tempering risk appetite.
- Careful review of cyber policy wordings is crucial to reduce the risk of disputes over cyberattack claims.
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