Munich Re on the cyber risks and trends that will shape 2024
Munich Re on the cyber risks and trends that will shape 2024 | Insurance Business Australia
Reinsurance
Munich Re on the cyber risks and trends that will shape 2024
Focus will be on managing exposure, reinsurer says
Reinsurance
By
Kenneth Araullo
The cyber insurance market is witnessing significant evolution. In its latest report, Munich Re highlights this progression amid increasing digital threats.
Thomas Blunck, CEO of reinsurance at the company, highlighted a notable gap in cyber risk coverage, referring to a global cyber survey which found that 87% of managers believe their companies are inadequately protected against cyber threats.
“Risk awareness and demand will continue to rise, also against the backdrop of a rapidly growing threat from aggressive cyber criminals, new technologies and dependencies, as well as geopolitical crises,” Blunck said in the report.
The escalation of cyber risks has been propelled by rapid advancements in technology, including artificial intelligence and cloud computing. This growing reliance on digital infrastructure across global industries, coupled with the sophistication of cybercriminals and geopolitical strains, creates a challenging cyber threat landscape.
The digital economy’s reliance on IT, IoT, OT, and digital services underscores the role insurers play in safeguarding businesses against cyber threats. Despite this, a Munich Re survey indicates a significant portion of global decision-makers believe their cyber protection is insufficient, highlighting a need for increased cyber insurance penetration and resilience.
Rising cyberattacks and other breaches
Recent months have seen a spike in cyberattacks, with ransomware payments and business email compromise losses soaring. Data breaches continue to impose heavy costs, with the average breach price reaching new heights. These incidents underline the importance of cyber insurance in mitigating financial losses from cyberattacks.
Looking ahead, the cyber risk landscape is expected to be shaped by several key trends and threats. The adoption of artificial intelligence poses both opportunities and challenges, with AI expected to automate and personalize cyberattacks. However, AI is also expected, in some cases, to bolster cyber defense capabilities. The regulatory landscape, such as the EU Artificial Intelligence Act, is evolving to address these new challenges.
Stefan Golling, a Munich Re board member responsible for global clients and North America, stressed the importance of maintaining a deep understanding and underwriting of cyber risks despite technological advancements.
Nation-state cyber activities and the spread of disinformation pose significant threats, with the potential to undermine democracies and disrupt major elections. Cyber operations by state-supported actors are becoming more sophisticated, highlighting the need for robust cyber defense mechanisms.
The security of space, satellite, and communication systems is also emerging as a pivotal aspect of cybersecurity, reflecting the complex and interconnected nature of modern digital threats.
The cyber insurance sector is at a pivotal juncture, it was said.
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