Cyber Risk: The Implications for Reinsurance Simon Cooper Partner, Ince & Co LLP

The Threat Cyber now as big a threat as natural catastrophes? Silent cyber cover How big is it really?

Large Loss Examples North East US Blackout $243bn - $1tn impact on the economy $21.4 - $71.1bn insured loss Cloud Server Disabled $4.6bn - $121bn loss $620m - $8.1bn insured loss Mass Vulnerability Attack $9.7bn - $28.7bn $762m - $2.1bn insured loss

Coverage Issues Date of loss Reporting Exclusions

Aggregation of Cyber Losses Events, causes and originating causes The Hours Clause Alternative Bases of Aggregation

Events and Causes American Centennial v. INSCO Non-physical event Sudden Significant Causal Link Fortuitous Cause State of Affairs Absence of something happening Originating Cause

Hours Clause “…a Loss Occurrence includes all insured losses which arise directly from the same cause and which occurred during the same period of time and in the same area. Such cause is the peril which directly gives rise to the losses” “…if the number of Loss Occurrences cannot be determined by reference to [the above] the parties agree to seek expert advice …” “…one Institution…” “…one country…”.

Other Aggregation Any one named virus Any one incident Each year ILW