Franck Baron, group deputy director of risk management and insurance at International SOS, and chairman of PARIMA
Risk and insurance managers in Asia-Pacific and worldwide are facing tougher renewals with their insurers in .coming months than have been seen for a very long time, and can expect serious conversations about cyber cover as the insurers seek to remove it from traditional lines and set up standalone policies instead
Franck Baron, chairman of PARIMA, told Commercial Risk Asia that he is not surprised insurers are working to tackle so-called non-affirmative cyber in other lines of business
He believes that on the whole, this is good news for insurance buyers because it will give more clarity and certainty when the claim hits
But Mr Baron stressed that any previously non-affirmative cyber cover that insurers want to exclude should be “factored in at renewal pricing negotiations”, with reductions in costs for buyers
A growing number of insurers and insurance markets have announced plans to tackle silent, also known as non-affirmative, cyber cover in other lines of business Silent cover is where no cyber exclusion exists but there is no affirmative cover either This leaves neither insureds or insurers knowing where they stand and is leading to coverage disputes
Following the 2017 NotPetya and WannaCry cyberattacks, cases have emerged in which property insurers are denying coverage based on war exclusions in their policies There are ongoing disputes between Merck and its insurers, as well as Mondelez and Zurich Insurance
In the UK and London market, this is being partly driven by regulatory intervention from the Prudential Regulation Authority Lloyd’s has told its syndicates, including Lloyd’s Singapore, that they must make clear whether they include or exclude cyber risk in property policies by the 1 January 2020 renewals They will then have to do the same in other lines shortly after The German regulator Bafin is also reportedly taking action
There is also growing, parallel action on this topic among the big, global .company insurers Kicking off with Allianz Global Corporate Specialty late last year, more and more have publicly stated they are removing non-affirmative cyber cover There is action going on across the board and the direction of travel is clear
PARIMA’s Mr Baron, who is also group deputy director risk management and insurance at International SOS, argues that relying on “bits and pieces of cyber coverage from various lines of insurance is dicey at best”
He is therefore in favour of insurers tackling silent cyber cover He thinks this will help buyers clarify the need for dedicated cyber insurance, which he suggests can now deliver
“After years of maturation, it is more than time to secure a fully dedicated programme for these risks,” he said Mr Baron said that when organisations properly assess cyber risk, they “quickly understand that in most cases they are going to need a dedicated coverage to support incident response and financial consequences”
Source: www.commercialriskonline.com/parimas-baron-supports-affirmative-cyber-but-warns-insurers-on-costs/