Portuguese risk managers question value of cyber cover

The hard cyber insurance market has become such a big issue that companies must ask themselves whether it is really worth buying the cover, leading Portuguese risk managers said during the Lisbon leg of this year’s Risk Frontiers Europe survey. The transfer of systemic risks in the hard market is a challenge faced by companies across Europe, and it is particularly worrying when it comes to cyber risks, according to Pedro Cupertino de Miranda, the risk, cyber security and data protection officer at retail group Sonae. “We have to increasingly ask ourselves whether cyber insurance is of any use with its current offer. If someone tells me that cyber insurance will one day cover liability exposures, for instance linked to the leaking of data from clients, maybe so. But cyber policies today do not pay ransoms or losses linked to data breaches. If insurers offer consultancy and forensic analysis, I prefer to choose my own resources for that,” he said. “The usefulness of cyber insurance is a theme that must be discussed with the insurance market,” agreed Tiago Antunes, head of risk management at Metropolitano de Lisboa. “We need an answer for it, and one that is affordable.” “But first of all, we need to do our homework and try to mitigate the risk as much as we can, and only transfer what is necessary to the insurance market. We cannot expect that insurers will solve all our problems with cyber,” Antunes said. “And we cannot say that we will close all our doors because that is not possible. The question is not whether an attack will take place, but when. And then when the second attack will happen and so on,” he added. Those that have done so can attest to how important it is to be prepared for cyber risks. Portuguese risk managers say that cyberattacks have been taking place all the time and it is only a matter of when a company gets hit. “We often suffer tentative cyberattacks but none have been successful so far,” said Jorge Neto, the insurance manager at retail group Jerónimo Martins. “Retailers are moving in the right direction, information is replicated several times and stored in units that have as high a degree of autonomy as possible. This is making us more resilient against cyberattacks,” he added. Cupertino de Miranda also believes that preparation is key in order not to rely on underwriters that have shown little interest in taking cyber risks. “We have invested more in cyber resilience than in cyber insurance. We believe that if we are resilient, we will be able to resume operations more quickly after an attack. Nobody wants to be three days out of business. In practice, we need to work in a way that we may not need cyber insurance,” he said. But André Rodrigues, who works for BNP Paribas in Portugal, warns that it may not be enough to do things well in-house if vulnerabilities can be found among a company’s customers and suppliers. “It is necessary to build up cyber resilience as it has become very hard to transfer the risk. And that means not only building up our capabilities but also making sure that our business partners are resilient too. Interdependencies are very high, and sometimes they are almost impossible to identify with absolute precision,” he said.

Portuguese risk managers question value of cyber cover

Focus on cyber prevention rather than transfer

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