Reinsurers RiskIirrelevancy If Cyber Demand Is Not Me – Munich Re
Reinsurers RiskIirrelevancy If Cyber Demand Is Not Me – Munich Re
Senior executives at Munich Re have issued a warning that if the re/insurance sector doesn’t find methods to address the rising demand for cyber cover with new products and services, it “may lose relevance.”
Torsten Jeworrek, CEO of Reinsurance, said there is still “high demand” in the cyber sector despite a lack of available capacity this week at the reinsurer’s 2022 RVS conference in Monte Carlo.
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He added that Munich Re’s performance in “all years” with cyber has been “very good” and that the sector continues to offer extremely attractive growth prospects.
Analysts at the firm expect the worldwide cyber market to grow from $10 billion as at the end of 2021 to around $22 billion in the next four years.
Reinsurers RiskIirrelevancy If Cyber Demand Is Not Me – Munich Re
“That is not surprising at the end of the day because the more we are in the digital environment, be it internet businesses, be it real assets and machines and everything, the more that all depends on digital information and business models to model risk,” Jeworrek told attendees at the Monaco conference.
“It’s important to the manufacturers and to the customers,” he added. “So the demand is there.”
The management of Munich Re did point out, however, that their excellent experience does not necessarily mirror the experience of the larger market, since players have only withdrew capacity in response to an increase in losses and subpar performance.
The United States continues to be seen as the most significant cyber market, despite the executives’ acknowledgement that other markets including Europe and Asia are “catching up” due to prices rising as a result of a lack of coverage to match the rising demand.
Jeworrek provided the following insight into Munich Re’s position in the market going forward: “We have always said we want to expand that market with solid underwriting competence, with good cooperations, and with tech businesses.”
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“You need a lot of tech insight and know how to understand the development of cyber risk, because that is not a long-term business in terms of the risk which remains unchanged,” he continued. “The cyber risk changes every minute, every day. And we have to understand that we want to be a technical, conservative and good underwriter.”
Reinsurers RiskIirrelevancy If Cyber Demand Is Not Me – Munich Re
Jeworrek also asserted that Munich Re has “an ambition to develop that market” and has accordingly invested heavily into its technical capabilities and expertise on the cyber front.
“We have more than 100 cyber underwriter who are specially trained and a lot of relationships with tech companies also,” he reported. “So we feel quite good. But again, pricing and technical understanding and underwriting quality is a must for us.”
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During the same Monte Carlo briefing, Jeworrek also addressed the challenges facing Munich Re and the wider reinsurance industry as it heads into the critical 1/1 renewal period and said that Munich Re has no ambition to shrink its capacity on offer despite the “highly uncertain” market environment.
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