Marsh wants the government to do more to address catastrophic cyber threats by establishing “really clear” regulations, promoting awareness, fostering collaboration and “considering a framework and a fund” to cover uninsurable risks.

The broker’s head of cyber, Gill Collins, told the Insurance News cyber seminar last week the magnitude of the risk means reinsurers may not be able to respond alone.

Marsh wants “some kind of insurance backstop” to be explored.

“If a certain threshold is passed, an event could have such severe implications that traditional or alternative transfer can find it really challenging. Then you’ve got what I would call unquantifiable risk.

“A public-private partnership could potentially sustain the market and the broader economy as a whole.”

In a catastrophic cyber loss event, “massive implications” include severe losses, reputational damage and operational disruption across industries.

Ms Collins says the government can help with public awareness campaigns and training programs, and by working with the insurance industry to develop tailored cyber insurance, while encouraging moves such as standardisation of policy language to simplify buying. 

Government should create a dedicated fund to help businesses affected by cyberattacks, she says. This could include state allocations and contributions from the insurance industry. 

“I would love to see a dedicated incident response team that can assist organisations that need help during cyber risk; that they can come in with great expertise and really help as organisations respond,” she told the seminar. “Fostering partnerships between government agencies, cybersecurity firms and the insurance industry – it’s going to be critical in the preparation for catastrophic events.” 

See Analysis.