Aon: Cyber Underwriters Taking a Second Look at Ransomware
The rise of ransomware attacks has lead some underwriters to raise rates and pull back on capacity, said Catherine Mulligan, head of cyber for Aon Reinsurance Solutions, at the Joint Industry Forum in New York.
Q: How would you describe the cyber market today?
A: The cyber market has never been more dynamic. There are impacts of losses coming in where insurers have been carefully evaluating the capacity that they're deploying. They're pulling back in some cases. We're seeing major rate increases — more than we even anticipated at the beginning of . And additional underwriting methods are coming into play. So all of that is really leading to many changes in messaging to original insureds, and how insurers and reinsurers are thinking about how they deploy capacity.
Q: Ransomware has been in the headlines a lot, how is that impacting the industry?
A: There have been headline attacks and I would say that the financial impact at this point has been relatively limited to the industry. What it has done is underscored concerns about the systemic potential of ransomware. So we have seen ransomware having an impact on attritional loss ratios. That is certainly happening and insurers and reinsurers alike are paying attention to the ways to evaluate the systemic nature of the problem.
Q: How should the insurance industry be responding?
My feeling is that the industry has always been poised to be creative in how we think about emerging risks. So this should be no different. There are new tools that are coming in to evaluate the exposure and scenarios to think about risk tolerance. That has to continue so that we can develop new capacity, hopefully alternative capacity, so that we can have a long term stable market.