Cyber mutual MIRIS COO targets capacity crunch
Market whispers that mutual insurer MIRIS (Mutual Insurance and Reinsurance for Information Systems) might outperform the conventional market for cyber protection and even bring about wider change in the cyber market were downplayed by Mark Pollard (pictured), its chief operating officer, speaking at Cyber Risk and Insurance Innovation Europe 2023 conference, in London, on February 7, 2023.
He referred to MIRIS, which only secured a licence to begin underwriting from Belgium regulators in December 2022, as “a very humble organisation”. It was launched by industry veterans Pollard, Danny Van Welkenhuyzen, and Philippe Obert in collaboration with leading European corporations with the aim to provide additional cyber insurance capacity for its members.
Interest in the mutual, Pollard said, centres on its efforts to help resolve the insufficient supply of capacity to meet demand for cyber coverage, although he stressed the organisation is “not challenging the conventional insurance market”.
Its size and exclusivity give a clue to why this might be. MIRIS is owned by its 12 members and operates for them, only insuring cyber risks.
Pollard conceded that MIRIS is "moving towards" helping resolve the capacity issue but said: “We certainly haven't got the magic wand to resolve it.”
He told delegates that he doesn’t necessarily think the organisation can do anything better than the conventional insurance market. “But we have a way of doing business which means that one day the conventional insurance market might be able to learn something from us.”
Pollard has been asked in the past whether the conventional market could behave in a different way and the answer to that is probably yes, he said.
“But I don't know in what way they could be different. Obviously, they don't know because otherwise they would be behaving differently.”
However, he added: “I think there's a fundamental point that the conventional market requires a credible stochastic model, which is an extrapolation of past events to be able to produce a rating model to insure something. And because of the threat of state actors and a whole range of aspects are very inconsistent, such as very inconsistent records of people being insured or not insured, what's covered what's not covered. I think that the conventional market really struggles to produce that stochastic model."
Pollard said MIRIS is going about it in a different way, particularly with its 12-member set up where "we're all in it together".
For example, they have a rating model, which gives a score to the members, which is very largely based on crisis management and what happens after the crisis.
He added: "Self-insuring is more of a desire to share knowledge, share expertise, share best practice, as opposed to someone who's just buying insurance."
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