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(Reuters) — Munich Re is planning new wordings in cyber insurance policies to exclude war, to avoid disputes over what is covered, the reinsurer's top cyber underwriter told Reuters.
Russia's invasion of Ukraine has raised fears of cyberattacks, with the risk that Western businesses or government institutions could be targeted.
Most cyber policies cover companies against business interruption losses and the repair of hacked networks following a cyberattack but exclude war. However, grey areas in the wordings leave insurers open to claims as a result of cyberwar.
S&P Global said last week that insurance losses from the Ukraine conflict could total $35 billion, with cyber one of the classes of insurance most exposed.
Munich Re is seeking clearer war exclusion clauses in cyber policies, based on wording developed last year in the Lloyd's of London market.
The invasion of Ukraine is not a “classic cyberwar,” said Jurgen Reinhart, chief underwriter, cyber, at Munich Re, but he said it was best to be prepared.
“Let's not wait ... but act now,” he said.
Munich Re said last month it was winding down business in Russia.
Munich Re is looking to bring in new wordings on its direct cyber insurance products, Mr. Reinhart said. The reinsurer is also suggesting to its cyber insurer clients that they introduce similar clauses.
Ambiguous business interruption policy wordings have led to a slew of court cases across the world in the past two years over whether the COVID-19 pandemic was covered by insurance.
“We have learnt this lesson as an industry in respect of the pandemic — how painful it is if you have unclear wordings,” Mr. Reinhart said.
“Our intention is to have very, very clear wordings ... and avoid surprises.”
Julia Graham, CEO of U.K. insurance buyers’ association Airmic, said clarity was needed.
“There has been a lot of uncertainty among Airmic members around war exclusions, especially for their cyber policies,” she said. “The lack of standardized policy wordings on cyber in the market has certainly not helped things.”
(Reuters) — German reinsurance group Munich Re on Wednesday forecast a 14% jump in profit this year as it reported a bounce back in 2021 from the coronavirus pandemic despite big claims from natural disasters.