Tom Bolt, Lloyd’s director of performance management, recently argued that individual insurers’ solvency may be in danger if a “US or UK cyber breach attacked several industries without a government backstop.”
Bolt argued that the industry might be able to weather an attack against a given company or a given operating system for a particular industry, “but if someone does a ‘back door’ with a common programme you see in most companies, then they pull the hatch on that and we have five industries that have massive losses – that could be something which threatens individual insurer’s solvency. I don’t think we are in a position to responsibly take on that risk.”
Bolt believes that a government cyber backstop is necessary to prevent this while simultaneously gathering more support from commercial reinsurers. Additionally, Bolt believes that a database of attacks must be compiled to better prepare both the insurance industry and governments. Such a database should be completely anonymous so that firms do not worry about their vulnerabilities becoming publicly known, said Bolt.