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 president Vladimir Putin’s invasion of Ukraine has raised fears of cyber attacks, 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 cyber attack, but exclude war. However, grey areas in the wordings leave insurers open to claims as a result of cyber war, reported Reuters.
S&P Global said that insurance losses from the Ukraine conflict could total $35bn, 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 reinsurer is also suggesting to its cyber insurer clients that they introduce similar clauses.
Munich Re chief underwriter, cyber Juergen Reinhart said, “We have learnt this lesson as an industry in respect of the [COVID-19] pandemic—how painful it is if you have unclear wordings.”
Ambiguous business interruption policy wordings led to a slew of court cases across the world in the past two years over whether or not the COVID-19 pandemic was covered by insurance.
“Our intention is to have very, very clear wordings ... and avoid surprises,” Mr Reinhart said.
Munich Re said in March that it was winding down its business in Russia. A