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Staying ahead of the Cyber Juggernaut!

May 13, 2018

Between running two Tech events popped many a question (and some answers). Bangalore was about exploring “New World Governance & Risk Order:  Responding to Technology Disruptors!” Srikar Reddy, the keynote speaker, reminded of the compelling pull of the internet. As a result, everyone commenced parking everything on the World Wide Web. And then, suddenly we began witnessing the enactment of the ancient silk route! The free flow of global commerce started getting disrupted by the robbers and warlords. As a result one of the biggest businesses as on date, alluded Srikar, is about securing digital assets. There comes in Cyber Insurance, which literally continues to grope in the dark as of now.

Ahead of the announcement of Trump-Kim summit in Singapore just before the second event – this time a two day forum on Cyber Insurance in the Lion City – pilgrims at the Berkshire Hathaway AGM heard the ‘Oracle of Omaha’ pronounce his verdict. That there’s a 2% chance of a $400 billion cyber-based disaster happening each year!

How do we deal with many a Future Shock of a Brave New World?

Not too long ago I recall quizzing a group of young health actuaries as to how would they look at humans living up to 300 years. While today this is scientifically possible, it just did not fit into their logic. Some suspected I was alluding to science fiction! But if only we took Sci-Fi more seriously – we would be readier to deal with the woes that the cyber world has brought upon us. Asimov’s “Three Laws of Robotics” have been around for 75 plus years and Ray Kurzweil continues to amaze with the future of inventions and discoveries.

Popular literature and even bestsellers can put readers into a sleep easy mode. I pulled out from my collection a book review going back 22 years. Cybercorp was a great read on how the author foresaw the future of corporations enabled by the internet. Those were the heady days of this new found magic mantra, just as blockchain is today. But then the review was dismissive of hacking. While answers to the poser from the Oracle must be found and will be found – one ought to proceed with caution. The journey from known unknown to known known must be undertaken.

Anyone can find the answers provided you are future ready!

And that is the tough one. It is not really about your education or background but the mindset. Insurance is a horizontal business. It ought to relate well with all aspects of life in general. Yet we choose to prefer staying in silos. Insurers settle huge amount and number of claims yet the trust quotient remains weak. We believe digital is indeed the solution to this crisis even though premium and claims optimisation may be staring us in the face. Buying stakes in InsurTech is not going to make a disruptor out of an incumbent. The biggest risk to insurers from the world of cyber is fundamentally very existential.

All my panelists at Bangalore (and a few in the audience too – who threw up some profound thoughts on the likes of wave theory and the future of workforce) were future ready because they understood technology, its working and ramifications. None was an insurer. One of them, a US qualified attorney practicing out of the UK, shared some amazing insights into her current work. All the cases handled are analysed by artificial intelligence – all she does is be a friend and adviser to the clients.

At Singapore all but one speaker (an Ivy League educated techie) were from the mainstream insurance and only one speaker from the industry had a tech background. The general trend today is cyber as a part of financial lines & casualty underwriting. That does break the silo. Yet, despite the ‘horizontalising’ effect of cyber, many tend to allude to systemic risks and cross-class covers. That to me is an oxy-moron. So, from all those who stayed back for the concluding session on the day two, I sought some out-of-the-box assistance:

  • A marriage in Singapore was annulled because the husband decided to become a female. The local laws prohibit same sex marriage: What could possibly happen to various forms of insurance coverages?
  • A transgender male in Finland becomes pregnant: Implications for insurance contracts?
  • If humans do begin to live up to 300 years and in due course metamorphose from a pure human to a cyborg: How would underwriters evaluate and cover such a risk? (Needless to mention Michihito Matsuda the robot who garnered third highest votes in Tama city mayoral elections, Japan).

The first two being very recent facts and the third still fiction – are of real interest to me also as a student of diversity. And not surprisingly enough the process left a few in the cohort rattled!

What must insurers do to get closer to the ‘known known’?

Perhaps raise the bar and align their vision to something very compelling. I found one in this quote from Jeff Bezos. “Now take the scenario, where you move out into the Solar System. The Solar System can easily support a trillion humans. And if we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts and unlimited resources and solar power unlimited for all practical purposes. That’s the world I want my great-grandchildren’s great grandchildren to live in.”

Cyber is certainly an opportunity for insurers to be future ready. The first step in the journey towards arriving at the known known is after all the resolve to deal with the unknown! Let us, therefore, not lock up cyber insurance in a silo but rather tap into its power to unravel the unknown for us…

 

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