Speaking exclusively to The Insurer TV as part of #ReinsuranceMonth, Golling offered a bullish outlook on the cyber market, noting that Munich Re is “absolutely committed” to the product line and is looking to grow its market-leading position by providing “meaningful and reliable capacity”.
But Golling said that not every global reinsurer shares its view that cyber is an insurable risk, warning that if insurers and reinsurers shy away from the cyber market they will not survive and could face irrelevance.
“There are still a couple of reinsurers out there who question the insurability of cyber,” he explained. “We are quite clear and have openly commented that we are absolutely convinced that cyber is insurable and if we want to stay relevant we need to offer something on cyber.
“We want to be an opinion leader in cyber and we also want to be a market leader in cyber. This is something that you cannot do if you are questioning the product yourself.”
In 2020, Munich Re wrote $855mn in cyber premiums, split roughly 50/50 between primary insurance and reinsurance. Golling said the success in the carrier’s growth in cyber lies in its “three pillar” strategy.
This strategy includes the sharing of expertise and investing in capabilities, developing cyber solutions and services that go beyond “traditional” cover and providing meaningful and reliable capacity for insureds.
Golling said a central part of this strategy includes working with third parties and outside vendors to gain insight into cyber risk. He added that the market cannot assume it is leading the way on cyber and must look to learn from other cyber practitioners to better serve clients and protect its own balance sheet.
“We cooperate with start-ups, cooperate with experienced cyber security players and we really heavily engage with our clients. It’s not a capacity play for us, it’s really about mutually learning about cyber and mutually sharing the knowledge,” he said.
The executive noted that policyholders are becoming increasingly threatened by cyber attacks, which are also becoming ever more sophisticated. Golling added that the rising number of losses has caused prices for cyber insurance to mushroom, and risk carriers to limit their capacity.
He said claims from ransomware attacks have seen a particularly significant surge – a trend that is likely to continue – but added that this is an issue the market cannot cope with on its own.
“Some of the recent ransomware attacks have demonstrated that there can be substantial or rather complex losses coming out of such events,” he said. “Overall ransomware is not something that I think the insurance and reinsurance industry can not cope with.”
Building and engaging in public-private partnerships may be a solution to some systemic cyber threats for the industry, Golling said, adding that it was imperative industry tries to take on as much of the risk itself before passing on to the state.
He added: “It’s not our main interest to push risk away and on to government. Really we should try as an industry to cover as much of the risk that is out there ourselves and provide solutions. But we have to also admit that there are risks out there that are too big and too systemic.”