The management of marine cyber risks within Italy’s insurance and reinsurance sectors
14 March, 2025
104
By Alberto Batini, LLM (Partner, BTG LEGAL)
The management of marine cyber risks within Italy’s insurance and reinsurance sectors is evolving under the dual influence of regulatory mandates and market innovation. Below is an expanded overview integrating sources of law and regulation that shape the landscape, compared to UK and the rest of Europe:
Regulatory Framework and Legal Considerations
- European Union Legislation:
- NIS2 Directive (Directive (EU) 2022/2555): This updated Network and Information Systems Directive, effective as of 2023, places stringent cybersecurity obligations on entities in critical sectors, including maritime. Italian companies must implement risk management measures and report significant incidents within 24 hours. The directive serves as a cornerstone for insurers underwriting cyber policies, as compliance significantly impacts risk assessments
- General Data Protection Regulation (GDPR): For marine entities handling personal data, GDPR compliance is critical. A data breach involving crew or passenger information can lead to significant liabilities, which are now frequently covered under cyber insurance policies.
- Countries like Germany, the Netherlands, and France have advanced cybersecurity frameworks tailored for maritime operations. Germany’s IT Security Act 2.0, for instance, strengthens the cyber resilience of ports, while France’s ANSSI works closely with insurers to develop bespoke cyber policies for maritime clients.
- International Maritime Organization (IMO) Guidelines:
- IMO Resolution MSC.428(98), the Maritime Cyber Risk Management in Safety Management Systems, mandates that by 2021, all ships must include cybersecurity in their Safety Management Systems under the International Safety Management Code. Italian flagged vessels and ports have adopted these requirements, which insurers view as baseline standards for coverage eligibility.
Italy:
- National Cybersecurity Framework: Italy has implemented several measures to align with EU regulations, such as the NIS2 Directive (Directive (EU) 2022/2555), which emphasizes cybersecurity for critical sectors like maritime. Ports, shipowners, and logistics companies are required to implement robust cybersecurity strategies and incident reporting protocols
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- Italian Navigation Code: Italian courts increasingly interpret the seaworthiness of a vessel under the Navigation Code to include adequate cybersecurity measures. Non-compliance with cyber standards could result in liabilities for shipowners, affecting claims under marine insurance policies.
- EU Cybersecurity Act (Regulation (EU) 2019/881): This mandates the certification of ICT products, services, and processes, including those used in shipping and port management.
United Kingdom:
- The UK, post-Brexit, has mirrored EU regulations in key areas through its National Cyber Strategy 2022. Additionally, the UK Maritime and Coastguard Agency (MCA) issued guidelines under the IMO’s Resolution MSC.428(98), requiring cybersecurity integration into the International Safety Management Code.
- The Cyber Risk Management in Maritime (CRIMAR) initiative promotes collaboration between insurers and shipping companies in addressing cyber vulnerabilities.
Key Trends in Insurance and Reinsurance
- Growing Integration of Cyber Endorsements: Traditional marine policies in Italy are increasingly incorporating cyber endorsements, especially after the Lloyd’s Market Association Cyber Risk Exclusion Clauses (CL380 and its replacements) became widespread. These exclusions prompted insurers to offer standalone cyber policies tailored for marine clients.
- Parametric Solutions and Automation: Insurers are using parametric insurance models for cyber risks. These policies, based on predefined triggers (e.g., a ransomware attack disabling navigation systems), reduce disputes and provide faster payouts. This is particularly relevant for shipowners who must minimize operational downtime
- Reinsurance for Aggregated Risks: Italian insurers are turning to global reinsurers to manage systemic risks associated with large-scale cyberattacks. Events like the 2017 NotPetya attack, which affected shipping giant Maersk, have highlighted the potential for massive, aggregated claims. Reinsurance treaties now often include bespoke cyber clauses, reflecting heightened risk awareness
Italy:
- Cyber Endorsements: Italian insurers are increasingly adding cyber-specific endorsements to traditional marine hull and cargo policies. Standalone cyber insurance for shipowners and operators is also gaining popularity
- Parametric Insurance: This innovative model is growing in the Italian market, offering faster payouts based on predefined triggers such as ransomware attacks or system failures.
- Localized Reinsurance Partnerships: Italian insurers collaborate with major European reinsurers like Munich Re and Swiss Re to mitigate the impact of large-scale cyber incidents.
United Kingdom:
- The UK market leads in Cyber Aggregation Modelling, which predicts the potential impact of systemic cyber events across marine operations. Lloyds of London has set out clear guidelines on cyber exclusions and tailored policies for high-risk clients.
- Advanced Risk Analytics: Insurers utilize cutting-edge tools to model vulnerabilities, particularly in autonomous shipping—a field where the UK is a pioneer.
Rest of Europe:
- Port Cybersecurity Insurance: Countries with major ports like Rotterdam and Hamburg are leaders in insuring port authorities against cyber disruptions. These policies often integrate business interruption and liability coverages.
- Reinsurance for Catastrophic Events: France and Germany have adopted “quota-share” reinsurance treaties to manage risks from large-scale attacks affecting multiple clients.
Challenges and Solutions
- Technological Vulnerabilities: The adoption of technologies like autonomous vessels, blockchain logistics, and IoT-enabled cargo tracking introduces new risks. For example, a cyberattack exploiting these systems could lead to operational paralysis or even physical collisions. Italian insurers and reinsurers are exploring risk-sharing models and collaborating with cybersecurity firms to mitigate these threats
- Port Cybersecurity: Italian ports, such as Genoa and Trieste, are vital to global trade. Their increasing reliance on digital systems for logistics and customs makes them prime cyber targets. The EU Cybersecurity Act (Regulation (EU) 2019/881) and local measures enforced by the Italian Data Protection Authority (Garante per la Protezione dei Dati Personali) ensure enhanced security protocols at these ports.
Future Outlook
- Digital Resilience as an Insurance Condition: Cyber insurance policies now frequently require insured parties to demonstrate compliance with international standards like ISO/IEC 27001 for information security. Shipowners failing to meet these standards may face higher premiums or exclusions from coverage.
- Emerging Market Opportunities: Italy’s strategic location and its critical role in the Mediterranean shipping industry are spurring demand for specialized marine cyber products. Initiatives like the National Cybersecurity Agency (ACN) are creating public-private partnerships to enhance the resilience of maritime operations, potentially impacting reinsurance pricing structures
This alignment of regulatory mandates with market innovation positions Italy as an active player in addressing marine cyber risks through insurance and reinsurance. Enhanced risk assessment practices, regulatory compliance, and emerging solutions are set to define the sector in the coming years.
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