The chief executive of insurance giant Zurich warns that cyber attacks, rather than natural catastrophes, will become uninsurable.
Mario Greco, chief executive of insurer giant Zurich, has warned that cyber attacks will become soon “uninsurable.”
The attacks are becoming even more frequent and the damage they are causing continues to grow.
“What will become uninsurable is going to be cyber,” Mario Greco told the Financial Times. “What if someone takes control of vital parts of our infrastructure, the consequences of that?”
“First off, there must be a perception that this is not just data … this is about civilisation. These people can severely disrupt our lives.” he added.
Cyber attacks targeting critical infrastructures, such as hospitals, pipelines, and electric grids, could block their operations and cause extensive damage.
On May 2021, Ireland’s Health Service Executive service shut down its IT systems after they were hit with a “significant ransomware attack.”
With the increase in the number of cyber attacks, a growing number of organizations opted to transfer the cyber risk by underwriting cyber insurance.
The increase in cyber losses in recent years pushed up prices, some insurance companies also changed their policies to limit their refunds in case of cyber incidents.
In 2019, Zurich initially refused to refund $100 million to food company Mondelez because it considered the NotPetya attack as “an act of war” that is not covered by its policy.
On August 16, 2022, Lloyd’s of London announced that beginning March 31, 2023, it would require all cyber insurance policies to specifically exclude coverage for losses related to cyber attacks attributed to nation-state actors.
Greco explained that the private sector is not able to cover all the losses caused by cyber attacks and urged to “set up private-public schemes to handle systemic cyber risks that can’t be quantified, similar to those that exist in some jurisdictions for earthquakes or terror attacks”.
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