Willis Towers Watson has put together a $600 million stand-alone cyber insurance tower—likely the largest of its kind in history.
Peter Foster, executive vice president with the FINEX Cyber practice, said the tower includes 60 policies from 40 underwriters, which means about half of the available cyber insurance carriers in the marketplace participated.
“This indicates the kind of demand there is for cyber insurance, driven by the need to satisfy regulators and corporate boards,” Foster said. “With new carriers coming in, as well as those who have been in the marketplace, more limits are available. Cyber is a growth area.”
Newer market entrants such as Validus, Berkley, Sompo Canopius, and Safety National are encouraging, and are keeping premiums competitive, Foster said.
To protect the identity of the client, Foster declined to name the company or indicate its industry. He had no comment on premium.
Foster said Willis Towers Watson was able to get the market to respond quickly due to a combination of ample market capacity and a streamlined underwriting process, which has attracted larger clients seeking cyber coverage.
“Fortune 50 companies need to transfer cyber risk. They can absorb a $250 million loss, but $500 million or more makes more sense to them,” Foster said.
Underwriters from the US, London, Bermuda and Germany have shares of the risk. Foster said an insurer’s place in the tower was not necessarily determined by its time in the marketplace.
“Some want the premium, others like to be further away,” Foster said.
The deal was a “great collaborative effort” by the cyber teams at Willis Towers Watson, which employ about 50 brokers who focus on cyber, Foster said.