Featured Product

    EIOPA Chair Speaks on Implications of Cyber Risk for Insurance Sector

    February 26, 2019

    While speaking at the Third Annual Fintech and Regulation Conference in Brussels, the EIOPA Chair Gabriel Bernardino discussed what EIOPA is doing and what should be done to cope with the challenges posed by cyber risk at a global level. He opines that these risks affect the insurance sector on two levels: the first involves the security of the insurance business and the second relates to the role of insurance in covering and managing cyber risk.

    Mr. Bernardino believes that a well-developed cyber insurance market can help to raise awareness of businesses to the risks and losses that can result from cyber-attacks; to share knowledge of good cyber risk management practices; to encourage risk reduction investment by establishing risk-based premiums; and to facilitate responses to, and recovery from, cyber-attacks. The future demand for coverage of this kind will depend, to a large extent, on both the frequency of high-profile cyber incidents and legislative developments in relation to personal data protection. In this context, the implementation of the data protection regulation in EU may lead to a significant growth in cyber risk insurance, with estimates suggesting that there may be parity between the EU and U.S. markets in coming years. Although coverage of cyber risk by insurers is still in its infancy, most of the market is concentrated in the United States. Growth in this market, however, has been significant, with the current forecasts suggesting that premiums may reach USD 20 billion in 2025.

    He added that EIOPA has been monitoring developments in the cyber insurance market for some time. Last year, EIOPA published a report titled "Understanding cyber insurance" based on a structured dialog with insurance companies across Europe. Through this dialog, EIOPA identified a number of issues relevant to the cyber insurance market in Europe. It was found that the cyber insurance industry expects a gradual increase in demand for insurance, mainly driven by new regulation, the increase in cyber risk related incidents, increased awareness of risks, and the increased frequency and severity of cyber attacks. Regulation may be welcomed by the industry in a moderate fashion, as it could help to address some of the identified challenges.

    He also added that EIOPA took into account its work and these findings in the development of our supervisory convergence plan for 2018–2019. In this plan, cyber risk is identified as a priority under the supervision of emerging risks. As part of the activities in this field, EIOPA will develop guidelines regarding Information & Communication Technologies (ICT), security and governance, including cyber resilience, and will further develop supervisory practices that seek to assess information system resilience, cyber risk vulnerability, and the insurance industry’s use of big data. EIOPA will also look into an efficient way of carrying out stress tests on the resilience of the insurance sector to cyber-attacks. It is clear that cyber insurance affects countries worldwide, not just in Europe. Issues related to cyber security and cyber risk are, therefore, one of the three priorities of the EU-U.S. Insurance Project, in which EIOPA plays a leading role. He concluded that "This is a universal challenge! Everyone has to contribute to meet this challenge!"

     

    Related Link: Speech (PDF)

    Keywords: Europe, EU, Insurance, Cyber Risk, Regtech, Stress Testing, Guidelines, EIOPA

    Featured Experts
    Related Articles
    News

    EU Amends IFRS 9 Rule, Changes Concern Interest Rate Benchmark Reforms

    EU published Regulation 2020/34 regarding the International Accounting Standard (IAS) 39 and International Financial Reporting Standards (IFRS) 7 and 9.

    January 16, 2020 WebPage Regulatory News
    News

    FDIC and OCC Issue Statement on Heightened Cyber Security Risk

    In response to the heightened cyber-security risk facing the financial services industry and other critical business sectors, FDIC and OCC issued an interagency statement on heightened cyber-security risk.

    January 16, 2020 WebPage Regulatory News
    News

    BCRA Updates Regulation on Capital Requirements and Information Regime

    BCRA updated the rules on minimum capital requirements for financial entities and on certain aspects of the information transparency regime for quarterly and annual supervision.

    January 16, 2020 WebPage Regulatory News
    News

    BoE and FCA Outline Next Steps for LIBOR Transition in 2020

    BoE, FCA, and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents that outline the LIBOR transition priorities and milestones for 2020.

    January 16, 2020 WebPage Regulatory News
    News

    BIS to Expand Central Bank Membership

    BIS is to expand its central bank membership base and to increase collaboration in its work as a forum for international cooperation and as a hub for central banks and other financial authorities.

    January 14, 2020 WebPage Regulatory News
    News

    EIOPA Issues Technical Specifications for Market and Credit Risk Study

    EIOPA published the technical specifications, including instructions, for the market and credit risk modeling comparative study for year-end 2019.

    January 13, 2020 WebPage Regulatory News
    News

    FED Publishes FAQs on Tailoring Rules for Banks

    FED released a letter announcing the publication of an initial set of frequently asked questions (FAQs) in response to questions from institutions.

    January 13, 2020 WebPage Regulatory News
    News

    IA of Hong Kong Publishes Stress Testing Scenarios in Relation to ORSA

    IA of Hong Kong published the prescribed scenarios for stress and scenario testing to be used by the authorized insurers conducting general insurance business.

    January 13, 2020 WebPage Regulatory News
    News

    ISDA Paper Examines Legal Aspects of Smart Contracts Using Blockchain

    ISDA published a paper that discusses legal aspects of smart derivatives contracts that use the distributed ledger technology (DLT), which is also commonly known as the blockchain technology.

    January 13, 2020 WebPage Regulatory News
    News

    FDIC Letter on Submission of Call Reports by End of January 2020

    FDIC, in a letter to financial institutions, announced that the Consolidated Reports of Condition and Income (Call Reports) for the December 31, 2019 report date must be submitted to the Central Data Repository of the relevant US agencies by January 30, 2020.

    January 13, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4495