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Image: from2015 / Getty Images / iStockphoto Baden-Baden 2018 Excel. Grow. Invent. Baden-Baden | 22 October 2018 Doris Höpke
Image: from2015 / Getty Images / iStockphoto
Baden-Baden 2018
Excel. Grow. Invent.
Baden-Baden | 22 October 2018
Doris Höpke
2
Agenda
Cyber
insurance
market
Munich Re’s
cyber strategy
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Data-driven
solutionsExpanding the
boundaries of
insurability
Risk
Solutions
Reshuffling
the value
chain
Trends
Digital transformation demands new solutions from
(Re)insurance industry
Effectively serving our clients and strengthening
the business model
Traditional Reinsurance
Reinforcing underlying
profitability and growth
Risk Solutions
Building a diversified profit base
New strategic options
Traditional Reinsurance
3
Cyber insurance market
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
http://bwcio.businessworld.in/article/125-Billion-Connected-IoT-Devices-by-2030/26-10-2017-129552/
Digital revolution bears a hyper-connected world
27bn
2017
Smart
Data
Big Data
Virtual
Assistants
Artificial
Intelligence
Self-learning
Machines
5G
Biometrics
Cloud
Computing
Man-Machine
Collaboration
Robotics
Digital
EcosystemsSmart
Cities
4
125bn
2030
Cyber insurance market
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Cyber risks constitute one of the greatest threats we face… Economic losses are increasing without limits
5
Cyber insurance market
Source 2016: https://www.cnbc.com/2017/02/07/cybercrime-costs-the-global-economy-450-billion-ceo.html
Source Estimation for 2021: http://securityaffairs.co/wordpress/50680/cyber-crime/global-cost-of-cybercrime.html
The costs of cyber crime
6,000bn US$
450 bn US$
2016
2021
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Our biggest risk is the “strategic risk not to
find any insurance solution for cyber”
16 October 2018 6
… and a big challenge for the insurance industry
Due to increased interconnectivity, digitalisation, and development
towards IoT, Cyber is becoming a major concern for businesses
Cyber attacks like NotPetya have shown that cyber risks have the
potential to cause significant costs affecting different policies in various
lines of businesses
For the insurance industry cyber constitutes a significant risk of change
and a big challenge, especially due to its inherent accumulation potential
Supervisory bodies are sensitised to this topic and request (re)insurers to
assess and manage their (silent) cyber exposure appropriately
Silent Cyber exposure even aggravates the situation
Cyber insurance market
Baden Baden 2018 – Excel. Grow. Invent.
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Accumulation
Virus &
Malware
Data
breach
IT Service
provider outage
Outage of
external networks
State of the art risk management as true business enabler
Cyber insurance market
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Transparency – Do we write cyber?
Almost every conventional non-life policy
can be exposed to cyber risk
Silent Cyber exposure is potentially significant,
but it presents also a nearly untapped area of business
opportunities
Action required
Achieve transparency of the inherent exposure
Turn the silent coverage into at least non-silent or even
better affirmative coverage
Risk assessment and pricing
Accumulation control
Transparency is required to eliminate uncertainty regarding coverage
Strong correlation with cyber security market
Higher awareness of cyber risks/claims reporting will drive
demand for insurance solutions
GDPR implementation in Europe
Munich Re serves all client segments via Reinsurance
and Primary Insurance carriers
Well established player in US and RoW
Munich Re aims to keep 10% market share
in the growing cyber market
1 Estimates based on different external sources (Marsh & McLennan, Barbican Insurance, Allianz).
Cyber is one of Munich Re’s main strategic growth areas,
therefore we further invest in leading-edge expertise and strong global market presence
0
5
10
15
20
25
2015 2016 2017 2020 2025
RoW US
0
100
200
300
400
2013 2014 2015 2016 2017
PI RI
GWP global cyber insurance market1
in US$ bn
GWP Munich Re cyber portfolio
in US$ m
Cyber insurance market with strong expected growthMunich Re – Cyber reinsurer of the year 2017 and 2018
Cyber insurance market
8
Digitalization
Claims
Legislation
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
9
Agenda
Munich Re’s
cyber strategy
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Cyber
insurance
market
~ $ 71,644
~ $ 34,327
Smaller companies
Larger companies
Average costs of the most expensive attack
in 2016 in USA, UK and Germany
Smaller companies An easy prey
10Source: The-Hiscox-Cyber-Readiness-Report-2017 16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Munich Re’s cyber strategy
Bundling of risk transfer and services
1116 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Risk
Assessment
Post Incident
Response Services
Insurance policy
Munich Re’s cyber strategy
Munich Re offers cyber solutions
beyond risk transfer
Munich Re offers a fully fledged, market proven product with
solutions for the whole value chain
1216 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Munich Re’s cyber strategy
Data Breach
recovery
Forensics
Extortion
Negotiation
Crisis Manage-
ment
PR
Legal/Regulatory
Notifi-cations
INSURANCE
Claims
Enquiry
Risk
AssessmentCoverage
Pricing
support
Accumulation
Control
Hotline1st Level ResponseSales
Reports
Employee
Aware-ness
GDPR
Checks
Security
Monitoring
Protection
Suite Platforms
App
Risk Assessment
Post Incident
Response/Services
Insurance
policy
Pre Incident
Services
Speed-to-market at low
product development cost
Long-lasting partnership,
knowledge-sharing,
progression
Risk sharing, accumulation
management and capacity
Munich Re‘s added valueWhere can we support?
Munich Re’s cyber strategy
13
Offering a fully-fledged and market proven product as well as
solutions, services and experiences along the value chain
16 October 2018Baden Baden 2018 – Excel. Grow. Invent.
Thank you for your attention!
Baden-Baden | 22 October 2018
Doris Höpke
Image: from2015 / Getty Images / iStockphoto
