Lloyd’s Directs Syndicates to Monitor Cyber Risk to Avoid Aggregation

Lloyd’s is requiring all syndicates to conduct a review and analysis of their cyber risk aggregation.  Lloyd’s issued a bulletin on November 9, defining the term “cyber attack” and outlining the “Oversight Framework for Cyber-Attack Exposure Monitoring.”  Lloyd’s is asking every syndicate to design “cyber risk scenarios” to test the impact on their books and recommends using “plausible, but extreme” scenarios when considering the many types of cyber attacks that could potentially occur.  “The bulletin also directs syndicates to come up with scenarios that can be recorded, re-run, and applied to their existing books, with the intention of creating probable maximum loss estimates.”