As an emerging risk, cyber is something of an unknown quantity and presents difficulties for insurers in pricing against it. Miami-based Andrés Ávila and Alex Guillamont, of Kennedys Latin America (re) insurance lawyers, say the “ever evolving risk landscape and regulatory environment” muddied the waters still further.

In a joint statement they tell Latam IR: “Insurers in Latin America are struggling to adequately price cyber insurance based on adequate risk models.

“Paucity of information stands as the main challenge considering that data about cyber breaches and losses exist in small quantities in Latin America. This is aggravated by the reluctance of companies to report details of cyber breaches in fear of reputational risk, losing market share, etc.

“As such, international insurers doing cyber insurance business in Latin America are relying mainly on regionally adapted track records from Europe and the US, that do not always translate well into the region.”

Those views are echoed in part by Guy Carpenter experts who listed “reputational damage” as “another concern”, when dealing with cyber breaches. The firm goes further and claims “technology failure and cyber attacks represent a greater threat to most organisations than adverse weather, fire and social unrest combined”.

Javier Ybarra, the XL Group’s financial lines regional underwriting manager for Iberia and Latin America, says pricing cyber risk is “highly complex”, and factors like industry, client profile, internal organisation, territorial scope of the business and IT and security standards, are important considerations in arriving at prices.

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