Although cyber criminals tend to thrive on chaos, so far, the presence of a global pandemic hasn’t led to any significant rise in activity or threat, according to Tom Johansmeyer, Head of PCS.
“Does a virus like a pandemic, an actual physical virus, make people hack or disrupt networks? Not directly. But, do they mess up the rest of the world and the rest of society enough to make hacking or digital unrest easier to attain and more impactful? Absolutely,” said Johansmeyer.
His comments came during an insightful keynote and Q&A on day three of our virtual ILS Asia 2020 conference, held in July.
The focus of the discussion was around Covid-19 and pandemic, and specifically, second order catastrophe and non-catastrophe effects that come from such an event.
Alongside non-cat impacts such as strike, riot, civil commotion (SRCC), to property per risk and property cat reinsurance, Johansmeyer explored the indirect influence of the global pandemic on the cyber risk market.
According to Johansmeyer, from Q1 2020 onwards, as the pandemic gained momentum, the majority of cyber underwriters felt that activity or threat would increase.
“Not just because of the chaos created by the pandemic, the impact it had on businesses and households, but also the push to work from home, which introduces new infrastructure into companies,” he said. “If people are lazy about using VPNs, if they don’t understand how to use their equipment properly, this creates potential for exploits.”
He continued to explain that discussions with clients suggests that in the aggregate, there’s been no significant change in activity. However, threats are there and activity is occurring and as noted by Johansmeyer, whether or not Covid-19 is the driver isn’t the main issue.
“We’ve seen some big losses this year that may or may not be Covid-19 related, may or may not be Covid-19 influence, but it’s a big loss during the pandemic and that’s going to get your attention. And, what’s worth keeping in mind, is that during the pandemic, it’s going to be really difficult for you to manage attribution.
“You’ve got to not think, Covid-19 caused cyber, but cyber during Covid-19, the same goes for risk losses as well. You’ve got to realise that even if the pandemic isn’t directly responsible for a loss during this period, the fact that it occurs during this period is significant enough,” said Johansmeyer.
The audience heard how right now, the industry is split on most elements of cyber and Covid-19, and depending on where you sit in the market, opinions are going to vary.
“From what I’ve seen across my network in the cyber reinsurance sector, my stance is no major change one way or the other right now, but we’re keeping a close eye on everything,” he said.
As well as the on-demand playback, we will be archiving every session from our online and virtual ILS Asia 2020 conference over on our YouTube Channel in the coming weeks.