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Munich Re tightens up cyber insurance policies to exclude war

By Carolyn Cohn and Noor Zainab Hussain

LONDON (Reuters) – Munich Re is planning new wordings in cyber insurance coverage insurance policies to exclude struggle, to keep away from disputes over what is roofed, the reinsurer’s high cyber underwriter instructed Reuters.

Russia’s invasion of Ukraine has raised fears of cyber assaults, with the chance that Western companies or authorities establishments may very well be focused.

Most cyber insurance policies cowl corporations towards enterprise interruption losses and the restore of hacked networks following a cyber assault, however exclude struggle. Nevertheless, gray areas within the wordings depart insurers open to claims because of cyber struggle.

S&P International stated final week that insurance coverage losses from the Ukraine battle may complete $35 billion, with cyber one of many courses of insurance coverage most uncovered.

Munich Re is searching for clearer struggle exclusion clauses in cyber insurance policies, primarily based on wording developed final 12 months within the Lloyd’s of London market.

The invasion of Ukraine was not a “traditional cyber struggle,” stated Juergen Reinhart, chief underwriter, cyber, at Munich Re, however he stated it was finest to be ready.

“Let’s not wait…however act now.”

Munich Re stated final month it was winding down enterprise in Russia.

AIG, one of many world’s greatest business insurers, is contemplating reducing cowl for Russia and Ukraine, Reuters reported on Friday.

Munich Re was wanting to herald new wordings on its direct cyber insurance coverage merchandise, Reinhart stated. The reinsurer was additionally suggesting to its cyber insurer purchasers that they introduce related clauses.

Ambiguous enterprise interruption coverage wordings led to a slew of court docket instances the world over prior to now two years over whether or not or not the COVID-19 pandemic was lined by insurance coverage.

“Now we have learnt this lesson as an business in respect of the pandemic – how painful it’s when you have unclear wordings,” stated Reinhart.

“Our intention is to have very, very clear wordings…and keep away from surprises.”

Julia Graham, chief govt of UK insurance coverage consumers’ affiliation Airmic, stated readability was wanted.

“There was numerous uncertainty amongst Airmic members round struggle exclusions, particularly for his or her cyber insurance policies,” she stated.

“The dearth of standardised coverage wordings on cyber out there has actually not helped issues.”



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