Howard Kunreuther, a Professor of Decision Sciences and Business Economics and Public Policy at the Wharton Business School, speaks with about covering cyber risk as part of TRIA.

According to Professor Kunreuther, cyber risk needs to be protected by the federal government, for two reasons:

  • There is no way to determine the likelihood is of a cyber-attack
  • The potential consequences

With cyber risk being very ambiguous, the insurance industry has a hard time determining what the proper premium should be. One feature of TRIA that would be relevant for cyber coverage is the collection of any premium by the government only after a large loss. The payment process would be in place, and if there is a large loss, the private sector pays back the government over a period of time.

For more of our coverage of the IIS Global Insurance Forum, visit the On Demand Library.

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