Solve cyber and remain relevant to clients: Munich Re
The digital and networked economies of the world are under threat from the risk of cyber attack, according to Munich Re.
Speaking at the Monte Carlo Rendez-Vous, Torsten Jeworrek, member of Munich Re’s board of management, said: “Cyber risks are one of the biggest threats to the networked economy. Munich Re is making highly targeted investments in know-how and the development of networks in order to continually improve its services and insurance products.”
Jeworrek said that Munich Re expects moderate reinsurance premium growth from now until around 2020, with rates roughly in line with primary insurance premium growth.
According to Munich Re, the capital base of the reinsurance industry has been stable overall over the last three years and many reinsurers are using dividend payments and share buy-backs to manage their capital more actively.
Looking at non-traditional capacity and alternative risk transfer (ART), Jeworrek said that liquid or traded products such as cat bonds and industry loss warranties continue to be outgrown by other forms of ART and capital.
He said that total capital in this area had grown by around 10 percent to $95 billion, as of the first quarter of 2018.
He added that digital transformation offers new opportunities for reinsurers. Traditional reinsurance can grow via risk solutions and explore new strategic options, that may include reshuffling the value chain, expanding the boundaries of insurability, creating data-driven solutions and leveraging artificial intelligence.
However, according to Munich Re the increased networking of machines and equipment can also give rise to what it describes as “very complex risks” such as data theft, disruptions in the interactions between networked machines and even the possible failure of entire production lines and supply chains.
In a statement the reinsurer said: “The economic costs of large-scale cyber attacks already exceed losses caused by natural disasters. Where small and medium-sized enterprises are affected, such attacks can soon threaten their very existence.”
“We are taking up this challenge. Only by adapting our range of products to changing risks and requirements can we remain relevant for our clients,” Jeworrek concluded.
