The following article was written by my good friend Tony Ellwood. Tony is senior executive, underwriting, at Lloyd’s Market Association and a thought leader. We are grateful to Tony for allowing us to republish his article, which first appeared in the July 16th edition of Insurance Day.
The question of whether a running horse has all four hooves in the air simultaneously was one that perplexed generations. No matter just how closely a horse was observed, the motion of its legs was simply too rapid for the human eye to register accurately. It was not until the advent of photography and an experiment by Eadweard Muybridge in 1878 that the question was answered. He developed a camera that was triggered by wires attached to a horse’s legs allowing him to shoot 24 photographs as the horse ran past, which proved beyond a shadow of doubt that a horse does indeed lose contact completely with the ground in mid-gait.
There are many parallels between Muybridge’s study of the running horse and a new survey the Lloyd’s Market Association (LMA) has launched to understand the full extent of cyber risk being underwritten in the Lloyd’s market. The similarity is the sheer pace with which cyber liability has grown from its beginnings in the mid-1990s to current global premiums in the order of £1.5bn, and still rising sharply. The speed of that growth, combined with the rate at which cyber has evolved as a product, make it a particularly tricky line to pin down. What’s more, the question that has been formulating in the LMA’s collective mind is how much cyber liability is being written at Lloyd’s within other classes of business such as marine or aviation. This survey is the first attempt to comprehensively map that business.