Russia-Ukraine conflict driving more exclusions into re/insurance | #government | #hacking | #cyberattack

The Russia-Ukraine conflict is driving more exclusions into re/insurance, with Munich Re reportedly planning new wordings within its cyber insurance policies to exclude war, to avoid disputes over what is covered, according to Reuters.

The war in Ukraine has raised fears of cyber attacks, with the risk that Western businesses or government institutions could be targeted.

Most cyber policies cover companies against business interruption losses and the repair of hacked networks following a cyber attack, but exclude war.

However, grey areas in the wordings leave insurers open to claims as a result of cyber war.

S&P Global said last week that insurance losses from the Ukraine conflict could total $35 billion, with cyber one of the classes of insurance most exposed.

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Munich Re is seeking clearer war exclusion clauses in cyber policies, based on wording developed last year in the Lloyd’s of London market.

Juergen Reinhart, chief underwriter, cyber, at Munich Re commented: “The invasion of Ukraine was not a “classic cyber war. Let’s not wait…but act now.”

Munich Re said last month it was winding down business in Russia.

According to Reuters, commercial insurer AIG is also considering cutting cover for Russia and Ukraine.

Munich Re was looking to bring in new wordings on its direct cyber insurance products, Reinhart said. The reinsurer was also suggesting to its cyber insurer clients that they introduce similar clauses.

Ambiguous business interruption policy wordings led to a slew of court cases across the world in the past two years over whether or not the COVID-19 pandemic was covered by insurance.

“We have learnt this lesson as an industry in respect of the pandemic – how painful it is if you have unclear wordings,” said Reinhart. “Our intention is to have very, very clear wordings…and avoid surprises.”

Julia Graham, chief executive of UK insurance buyers’ association Airmic, said clarity was needed.

“There has been a lot of uncertainty among Airmic members around war exclusions, especially for their cyber policies,” she said.

“The lack of standardised policy wordings on cyber in the market has certainly not helped things.”

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