November 28, 2017
The UK’s government-backed mutual terrorism reinsurer, Pool Re, has announced that it will extend its cover to include material damage and direct business interruption (BI) as a result of cyber terrorism from April 2018.
The extension to include physical damage from cyber terrorism comes after more than two years of work, Pool Re said, and is based upon a research study commissioned from the Centre for Risk Studies at University of Cambridge Judge Business School to further Pool Re’s understanding of the nature of the cyber terrorism threat.
The cover excludes intangible assets and will be offered as standard to all policyholders which purchase terrorism insurance from Pool Re Members Pool Re CEO Julian Enoizi said; “We will continue to evolve our coverage and today’s announcement is an effort to future proof the Scheme and to close a potential gap in coverage before it became apparent.
“The threat from a cyber-attack is evident and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them. This was a clear gap in our coverage which left businesses potentially exposed. After rigorous analysis, we determined that we can close this gap. It is a pivotal moment for Pool Re which establishes a new standard for terrorism cover and places the UK at the forefront of nations reinforcing their economies against emerging risks.
He added: “It is also an indication of what can be achieved through cross-industry, academic and governmental collaboration. We will continue to research and evaluate other emerging terror threats as they become evident.”
Director of Research and Innovation at the Cambridge Centre for Risk Studies, Simon Ruffle, commented; “The Centre has applied an academic approach to modern business, enabling a deep analysis of current geopolitics and technology in order to illuminate the shape of an emerging threat to the UK economy. The cyber terrorism scenarios we examined provide insight into what types of attacks might be possible in the next few years that could impact Pool Re’s portfolio.”