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Are cyber risks insurable? Risk expert Prof. Dr. Michel Dacorogna gives valuable insights

Updated: Jan 31, 2019


Interview with risk expert Prof. Dr. Michel Dacorogna on cyber risks.
"The stealing of data is the main cyber risk threatening businesses today." Prof. Dr. Michel Dacorogna

The stealing of data, as well as attacks against harbors, power plants, payment systems and healthcare are the main cyber risks that humanity will face in the future. How can companies successfully protect themselves against hacker attacks today? Prof. Dr. Michel Dacorogna, a renowned risk expert, has been researching cyber risks at ESSEC-CREAR in Paris. His findings provide important answers to how insurers can properly cover cyber risks and where the challenges of traditional insurance coverage lie.




Prof. Dr. Michel Dacorogna, what are cyber risks?

For a good definition of cyber risks for insurance, I use the definition in the paper of the CRO Forum that appeared in June 2016 *:


“The definitions of cyber risk covers:

  • Any risks emanating from the use of electronic data and its transmission, including technology tools such as the internet and telecommunications networks.

  • Physical damage that can be caused by cyber-attacks.

  • Fraud committed by misuse of data.

  • Any liability arising from data use, storage and transfer, and

  • The availability, integrity and confidentiality of electronic information – be it related to individuals, companies or governments.”


When did Cyber Risks first appear or become a threat?

There is a misconception about this risk. It is not new at all. It is as old as the use of computers linked with each other. In the early eighties, I was using the ancestor of Internet called Arpanet to access the Cray 2 supercomputer of the Lawrence Livermore Laboratory (the most important research centre of the US army). One day, I had two CIA officers visit my apartment in Geneva because some hackers used my account to try to break into their system. This was in 1985! They turned out to be hackers from Hamburg. You see, as soon as computers are linked, the risk of somebody breaking in, starts. However, with the wide use of Internet and the advent of the Internet of Things (IoT), this risk has become prevalent in the whole society and is not only limited to special centres.


What are the key cyber risks threatening businesses?

Our economy is based more and more on the heavy use of data. The GAFA (Google, Apple, Facebook and Amazon) made it a spe