Growth of cyber offerings a hot topic
The development of cyber offerings is a key focus for Willis Re’s clients, according to Dirk Spenner, managing director of Willis Re EMEA North/East.
He explained that different companies are approaching cyber at varying speeds depending on what the original client base is.
“If you have an original client base that is significantly industrial and commercial-oriented, your cyber offering will have developed much earlier,” Spenner said.
“Many look at cyber as a significant agent for growth; there have been a number of predictions made by industry leaders about the growth potential of cyber income and it’s likely to be the fastest-growing line of business in the next few years.
“While it is still in the infant stages of modelling, it’s something you want to have in the armoury of your reinsurance offering—it’s a marketplace that is developing and growing. Clients want to benefit from it and offer their existing client base this as a complimentary product.”
He added that it is an offering clients approach with great interest, but also a healthy amount of caution.
“It’s the ultimate accumulating risk and that’s where the caution stems from. There’s only a relatively short history you can look at for risk assessment and tariffing.”
Spenner said that Willis’ cyber risk portfolio modelling tool PRISM-Re is performing well for its clients. The industry’s first cyber risk modelling tool, PRISM-RE was released in February 2015 and undergoes ongoing development.
It helps clients quantify and manage their portfolio exposure to data breaches, the leading cause of cyber losses. Based upon the latest exposure data, the tool estimates the frequency of data breaches and the potential severity of insured losses arising from those events.
“It is something we wish to develop further. It’s a very interesting field to be in and we pride ourselves on having a very significant offering in that field. We invest a lot of effort and manpower to develop for our clients a cyber offering they will find second to none and I think it will be a very significant area of our industry going forward,” Spenner said.
Asked for his view on the effects of this year’s nat cat events on international pricing, Spenner said it is still too early to say.
“When it comes to the impact on an international scale—we shall see. Reinsurers are delayed in their decision-making at the moment so they are using Baden-Baden to find out how the market is set in order to firm up some of their opinions or take another view,” he concluded.
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