EIOPA published a report focuses on the cyber risk profile of insurers from the perspective of operational risk and analyzes the challenges and opportunities in the cyber insurance market in Europe. The findings identified the key challenges faced by cyber underwriters and confirmed the need for a sound cyber resilience framework for insurers.
The report finds that clear, comprehensive, and common requirements on the governance of cyber-security as part of operational resilience would help ensure the safe provision of insurance services. This would include a consistent set of definitions and terminology on cyber risks to enable a more structured and focused dialog between the industry, supervisors, and policymakers, which could further enhance the cyber resilience of the insurance sector. Furthermore, the report finds that enhanced data collection on cyber incidents and losses should allow insurers to manage and price their affirmative cyber risk exposures more effectively. Having common and harmonized standards for cyber-risk measurement and cyber-incident reporting could greatly facilitate the understanding of cyber risk underwriting. To this end, creating a European-wide cyber incident-reporting database, based on a common taxonomy, could be considered as well.
The report highlights that the cyber insurance market in Europe is still small in size but growing rapidly. In 2018, the data show an increase of 72% in terms of gross written premiums for the surveyed insurers and this increase amounts to EUR 295 million in 2018 compared to EUR 172 million in 2017. However, non-affirmative cyber exposures (where cyber risk is neither explicitly included nor excluded in an insurance policy) remain a source of concern. While common efforts to assess and address non-affirmative cyber risks are under way, some insurers have adopted a "wait-and-see" approach to address non-affirmative cyber risk, where the implementation of action plans to address non-affirmative exposure depends on the materialization of future events. Therefore, further effort is needed to properly tackle non-affirmative cyber exposures to address the issue of potential accumulation risk and to provide clarity to policyholders.
This report is based on the responses of 41 large (re)insurance groups across 12 European countries—Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, and United Kingdom. The sample under consideration is similar to the one for the 2018 Insurance Stress Test by EIOPA, representing a market coverage of nearly 75% of total consolidated assets.
Keywords: Europe, Insurance, Cyber Risk, Operational Risk, Cyber Resilience Framework, Governance, Underwriting Risk, EIOPA
Previous ArticleFSB Assesses Implementation of Compensation Standards and Principles
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.
The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.
OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.
EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.