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MONTE CARLO TODAY Wednesday September 16, 2015
State-backed cyber pool must be formed before cataclysmic attack hits
T
he risk transfer industry and governments should partner to form a state-backed risk
pool designed to cover worst-case scenario cyber attacks, Stephen Catlin, the executive deputy chairman of XL Catlin, told Monte Carlo Today. The former chief executive of Catlin said
that a devastating and/or prolonged cyber attack is the most serious threat facing society and one of the few that could have truly global implications. Yet governments are ill-prepared for such a scenario and the industry is very limited in its ability to help. Only a partnership and the formation of some kind of risk pool could help mitigate the consequences of such a scenario. “Terrorism is a relatively local threat,” Catlin said. “So are
earthquakes and hurricanes.
But a cyber attack has the potential to affect the entire world in a nanosecond. As things stand, governments are ultimately exposed to anything happening on this front, which means we are all personally exposed. “We all live through the internet these days.
If someone was able to knock the entire internet down, the whole economy would fall apart very quickly. It would be very painful for society. “I believe a mechanism could be put in place
Stephen Catlin
to move a chunk of this risk into the private sector. We manage to do it for terrorism risk, through mechanisms such as the Terrorism Risk Insurance Act (TRIA) in the US and Pool Re in the UK, (Continued top of page 2)
What’s inside
CHINESE RATINGS AGENCY OFFERS NEW APPROACH
HANNOVER RE SEEKS INVESTORS FOR ILS FUND
ASTA PLOTS MORE HIRES TO GROW IN MGA SPACE
AMLIN-LEADENHALL PARTNERSHIP BENEFITS BOTH
GROWING INFLUENCE OF ASIAN PLAYERS REFLECTED AT RENDEZ-VOUS
TIERING WILL CONTINUE TO SHRINK P/C LANDSCAPE: SCOR
IUMI CALLS FOR ACTION TO PREVENT CARGO THEFT
ROUNDTABLE: THE EVOLUTION OF ALTERNATIVE CAPITAL
MORE MGAS SEEK CAPITAL PARTNERS ON SIDECARS
WE WON’T BE DITCHING OUR REINSURERS: NOVAE
TMR’S CAPITAL SOLUTIONS LAUNCH PROVES COMMITMENT TO SPACE
NIMBLE ARGO TARGETS CHINA VIA NEW LLOYD’S SPS
SAACKE SETS SIGHTS ON TOP 10 FOR QATAR RE
Generali will re-enter ILS but balance with reinsurance G
enerali will continue to access the insurance-linked securities (ILS)
market, especially to offset European windstorm risk due to the attractive terms available. But it will also balance this with traditional reinsurance, seeking the most effective mix for its portfolio. Franco Urlini, group head of reinsurance,
Generali, which issued its first cat bond last year, told Monte Carlo Today that having monitored the ILS markets for many years, the
use of cat bonds was made possible when the company centralised its reinsurance purchasing programme. Before
this, a concentration of Italian
earthquake risk in its portfolio made such a deal less viable. Because reinsurers see this risk as an “attractive diversifier” on their books, it was already benefiting from very competitive rates in the traditional market. “The reason we did not enter the market before is mainly related to the peculiarities
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of our portfolio, which used to be largely dominated by Italian earthquake exposures,” he said. “We now have important exposures in
European windstorm that the ILS market offers attractive terms for. In the future we will continue to look at the traditional market as well as the ILS market and at any new products available, and we’ll always use the most effective and competitive tools available, including cat bonds.” (Continued bottom of page 2)
DAY 4: Wednesday September 16 2015 | MONTE CARLO TODAY | 1
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