Munich Re invests in cyber-risk coverage

Munich Re intends to be more involved in the cyber-risk [4] coverage. The earned premium volume in 2018 amounts to 500 million USD. To date, the results of this activity are profitable, which boosts the German reinsurer to adopt a more «aggressive» approach in the future.

The ultimate goal is to retain 10% of the portfolio and maintain the combined ratio within a range of 60-80%. Munich Re estimates its maximum exposure to a cyber incident to 1 billion EUR (1.14 billion USD) which stands at the scale of a medium-sized natural disaster.

In contrast, Swiss Re, Munich Re [5]’s direct competitor, is being cautious. The latter considers that the risk of cumulation is very high and that the current rates are too low for it to enter the market.