Cyber risks are among the greatest threats to a nation’s infrastructure, but state-subsidised insurance pools are not the answer, according to Munich Re.

Reinsurance CEO Torsten Jeworrek says insurance companies should instead work to prevent breaches occurring.

“Our priority should be to prevent risks,” he said.

Mr Jeworrek says the security of systems, production facilities and networks must significantly improve.

Policymakers should draw up security standards and broaden product liability, to incentivise manufacturers to produce flawless systems and software.

“The insurance industry is already offering solutions to protect companies and private individuals from financial losses,” Mr Jeworrek said.

However, insurers need a more in-depth understanding of the processes and circumstances of companies they cover.

“It is not just IT know-how that needs a significant upgrade; expertise in other areas such as legal issues, logistics, supply chains and production operations must also be further developed to better understand and identify the risks involved,” Mr Jeworrek said.

Mr Jeworrek says by clearly limiting exposure and increasing transparency on how insured companies are linked to one another, the insurance industry could assume many more risks than it does now.