From cryptoassets to cyber losses, we offer our international experts’ predictions on the opportunities and challenges that the reinsurance market may face in the coming year and beyond.

Reinsurance predictions
#1 Cryptoassets – watch out for Facebook’s Libra in 2020

In the past year, two decisions stand out in the fast-changing world of cryptocurrencies.  In Singapore, a dispute arose between traders when grossly inaccurate rates of exchange were adopted in a Bitcoin/Ethereum swap.  In the UK, following a theft of Bitcoin, an asset protection order was obtained over a Coinbase wallet.  Making legal history, the court found that Bitcoin should be viewed as property.  Although Bitcoin dates back to 2008, and over 2000 cryptocurrencies are traded, they have yet to break through into mainstream commerce.  It will be interesting to see if the Facebook initiative, Libra, can achieve this.  It aims to reduce volatility by being pegged to a basket of fiat currencies, with 50% of the basket comprising US dollars.  The anticipated launch is some time in 2020.

#2 Market will face more significant cyber loss than NotPetya

The NotPetya attack in June 2017 is the nearest the cyber world has come to a systemic shock. Regulators took notice, with the Prudential Regulation Authority and Lloyd’s ramping up measures to require insurers to manage exposure to cyber risk. Surprisingly NotPetya has not resulted in universal take-up of cyber insurance, even by large enterprises. Even those that have taken it up have not always purchased adequate cover. It is inevitable that there will be repeat attacks like NotPetya, with repercussions across the globe. Insurers and insureds must plan on this basis. 

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