A pan-European solution is needed to tackle "extreme and systemic" cyberrisk, according to Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority, or EIOPA.
Speaking at EIOPA's annual conference, Bernardino said that such a solution could also include other extreme events such as pandemics, severe natural catastrophes and terrorism.
More broadly, Bernardino said that the world's "love affair with technology" meant exposure to a growing number of increasingly sophisticated cyberattacks. "We have to set the standard for and develop a sound cyber resilience framework." He said that a "common European approach" was required, which should include cyber insurance "as an enabler of the digital single market."
Bernadino said efforts to tackle cyberrisk should begin with a standardized cyber incident reporting framework for sharing aggregate, anonymized data "so that insurers and reinsurers can develop adequate pricing and risk management models."
In addition to tackling cyberrisk, Bernardino said insurers and pension funds have a "powerful role" in mitigating the effects of climate change. He said this was possible "in a way that is aligned with good risk management practices and aligned with clients' interests."
He said that as large investors, insurers and pension funds are well placed to influence businesses to act responsibly, and have "an important role in the gradual transition to a more sustainable and resilient economy."
On the underwriting side, Bernardino said the industry could have an influence through loss prevention and mitigation, developing new insurance products, changing the pricing and design of existing products and working with public authorities. He added that insurers could do this "while maintaining the fundamental principles of sound risk-based pricing."
Bernardino praised the efforts of "a good number of EU insurance groups and pension funds" in taking leadership on climate change, but he added: "Let's be clear: More needs to be done and more generally to ensure that behavioral change becomes a reality."