Cyber breaches are a growing concern in the energy industry, a new briefing from A.M Best has said.
In the briefing, the global ratings giant highlights an attack in the Ukraine in 2015 which saw power turned off – similar incidents could bring “vital” sectors “to their knees”.
“For the utility sector, cyberattacks have always been a concern, but have become an even greater threat,” the briefing states.
“Unique risks and a highly complex supply chain demand extensive and highly specific underwriting expertise in the areas of loss engineering, claims handling, and loss prevention.”
The Ukrainian incident saw numerous substations switched off with outages impacting close to a quarter of a million customers. The briefing notes that while the industry continues to respond through cyber insurance offered by both speciality energy firms and the wider insurance community, “there is no way to predict” how the market may change or be impacted over the coming years.
“As a result, there is no way to determine what and how these adverse impacts will affect the specialty companies’ premium growth,” the briefing continues.
“In the past, the variability of premium growth in the energy/utility market has been the result of the termination or addition of lines of business by specialty insurers, particularly among single-parent captive insurers—but past performance is not indicative of future performance.”
