Swiss Re pessimistic about cyber

Accumulation risk is on Swiss Re’s radar, and it is leading the reinsurer to take a very conservative view on the sticky topic of cyber exposure. That was the position of the company’s group chief executive Christian Mumenthaler, speaking in Monte Carlo on Monday.

“I’m extremely sceptical about cyber. It’s clearly a risk that’s accumulating. The deeper you go, the clearer it is that very significant damage can be inflicted,” Mumenthaler said.

“There is a lot of over-optimism in the market. People write a lot of these policies and sometimes it sneaks into property policies We want to be significantly underweight [on cyber] – that’s our goal,” he continued.

The group CEO suggested that while individual storms such as Irma or Katrina are big events, it is the liability accumulation risks, such as asbestos, that represent a bigger threat for reinsurers.

“With the interconnectivity of the world increasing, through the internet, the cloud…it’s clear that the accumulation risk is only increasing. We need to do everything we can to understand these risks better,” Mumenthaler added.

Cyber risk, like nuclear terrorism and big pandemic outbreaks, are in the realm of intelligence agencies and governmental responsibility in the event of a major cyber-attack used to cause a real-world catastrophe, he suggested.

“So far, I don’t see a significant solution without government support,” Mumenthaler said. “What they know is that Russia, China and the US have significant capabilities to attack the other’s infrastructure. All you need to know is that the infrastructure is vulnerable. It’s possible to have a 9/11 moment in the cyber world. I hope it won’t happen,” he added.