OLDWICK, N.J.--(BUSINESS WIRE)--The recent WannaCry ransomware attack highlights the need for technology companies and end users to be proactive is taking steps to mitigate potential losses. A.M. Best recognizes that insurance companies tend to view cyber as a great business opportunity, but have been very cautious about taking on cyber exposures beyond a certain risk tolerance. According to a new A.M. Best briefing, the WannaCry attack could be a benefit to the insurance industry if it leads to a better ability to devise and craft appropriate policies with clear definitions and language, to attain the desired level of protection and coverage for policyholders.
A new Best’s Briefing, titled, “WannaCry Ransomware Attack—More to Come,” notes how WannaCry is an excellent example of how vulnerable the world is to cyber attacks. The ransom malware was unique in terms of its scope, speed and reach, and among its effects are the postponement of medical services, disruptions to major telecommunications networks and stoppages in manufacturing.
Although the ransom demand (from USD300 to USD600) per consumer is low, the aggregation of loss will be far larger. Furthermore, the aggregation does not take into account any potential litigation; potential class actions could elevate these losses even further and loss of data as well as of revenue could result in yet more residual losses. However, A.M. Best expects that insured losses will be minimal given the industry’s cautious and tepid position in cyber.
A.M. Best takes into consideration management’s overall approach to risk management when evaluating an insurer’s exposure to cyber. A.M. Best also believes that risk aggregation is another area with which all insurers should be concerned, particularly if attacks like WannaCry become the norm rather than the exception.
To access a complimentary copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=261760.
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