European insurance supervisors are taking a close look at cyber risk and its potential impact on the solvency of the insurance industry, according to Ferma.
Cyber risk is not included as a specific risk that needs to be quantified and risk weighted under Solvency II, the capital adequacy and reporting regime that will be implemented for the European insurance industry next year. But there is clearly a growing awareness among regulators that cyber risk could potentially lead to catastrophic or systemic losses for insurers through specific cyber policies or traditional coverages that are ‘silent’ on cyber exposures.
Former Ferma president Marie Gemma Dequae is the corporate risk and insurance manager’s representative on key committees formed by the European Insurance and Occupational Pensions Authority (EIOPA).
During Ferma’s press conference yesterday Ms Dequae said that EIOPA is investigating the potential impact of cyber risk on the solvency of the insurance sector. The authority is also looking into how insurers’ customer data is held and potentially exposed.
There is a tendency among supervisors to focus almost entirely on the risks to individual consumers and not corporations that they believe are adequately protected because of the existence of professional insurance managers.
Ferma and other bodies such as the European Captive Insurance and Reinsurance Owners Association (ECIROA) have struggled in the past to have their views heard by European Union institutions.
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