Cyber risk used to be an attractive market for insurance. However, after the supply continued to decline due to high levels of damage, several companies are now helping themselves, including Airbus and BASF. You set up your own insurer to be able to protect yourself comprehensively against cyber risks.
The company, called Miris, is to be based in Brussels and operate as a mutual insurance company. This means that it belongs to its members and only offers insurance coverage to them. In addition to Airbus and BASF, the tire manufacturer Michelin and the materials producer Solvay are among the founders. But they also want to recruit other companies.
Siemens insurance boss Alexander Mahnke, who is also chairman of the industrial insurance lobby GVNW, welcomes the founding. “The current initiative is not necessarily the last,” he says.
After a long period of low prices and comfortable contract terms, industrial insurers have been increasing prices for the last two years. The situation is particularly difficult in managerial liability and cyber insurance, which companies use to insure themselves against the consequences of hacker attacks and data leaks. After high claims, the insurers pulled the ripcord and not only drastically increased prices, but also reduced capacities. Many companies no longer get the protection they are looking for from several insurers – instead of 100 million euros, there is often only 30 million euros. The leading industrial insurer Allianz Global Corporate & Specialty rejects three quarters of all inquiries.
The insurer HDI was also created as a self-help organization
It is not the first time that the industry has taken such measures: the German insurer HDI was founded in 1903 as a self-help organization for the iron and steel industry. In the 1980s, large corporations, primarily from the USA, founded the insurer Exel. In the wake of the asbestos crisis, insurers had dramatically increased the price of liability policies or had withdrawn them altogether. Start-ups such as HDI or Exel were unable to compensate for the lack of capacity. However, they were clear signals to the insurers and brought with them a relaxation.
The new cyber insurer Miris should not work for profit and should be able to provide each member with a capacity of 25 million euros at the beginning, later more. However, mutuals also entail risks for the members. In the case of privately organized profit-oriented companies, the insurer bears the risk that the premiums are sufficient. It’s different at clubs like Miris. Here it can happen that customers as members have to make further payments if damage and costs are higher than expected.