As part of Advisen’s 2018 Cyber Guide: The Ultimate Guide to Cyber Service providers, I once again turned to brokers for their perspectives on the fast-moving cyber insurance marketplace over the last year.
And once again, they had a lot to offer. The word cloud below gives you a hint.
Clearly, attacks in 2017 such as WannaCry and Petya opened eyes of assorted companies of size in additional industries in more geographies—and brought to light additional risk such as property and business interruption. It doesn’t matter where clients are on the spectrum of realizing established known unknowns or coming to grips with new known unknowns, lessons were learned in 2017.
In the meantime, the insurance industry is making efforts to understand cyber risk in innovative ways, with fresh partners, in what likely is a never-ending quest to quantify risk. After all, will there ever be a time those involved in the cyber insurance value chain can sit on their hands? Probably not.
It’s a good time to be a buyer of broader cyber insurance and related services. Competition is fierce. Coverage has expanded. But it will help if you can demonstrate some degree of cyber hygiene and a business continuity plan.
The responsibility of a broker, and the need of one in order to match specific risk to the right solutions, has never been more heightened—no matter where you are, how large you are, or what your business does.
As the headline promises, here are a few highlights from what brokers had to say in the Cyber Guide. (Download the entire Cyber Guide now to see all of the brokers’ comments and begin the process of finding the right partners for all your pre- and post-cyber incident needs. It is a who’s who of companies in 10 categories from insurance and data & analytics to forensics and crisis management.)
Meredith Schnur | SVP | USI Insurance Services
In 2017 there was a huge shift from breach response/privacy to first-party business interruption in light of WannaCry and NotPetya. Prior to these attacks, we knew what business interruption was and knew how to explain it but there was not a ton of claims to hold up and point to. That has changed significantly over the past year. Now we’ve seen more claims and it woke everyone up to the fact there is a direct correlation to actual business income loss.
Bob Parisi | US Cyber Product Leader | Marsh
2017 saw large-limit cyber facilities become more attractive to organizations. This was due not only to the desire to purchase more coverage, but also a desire to not have to deal with multiple insurers on a complicated tower after a large loss. Toward this end, organizations began to demand cleaner, simpler cyber solutions starting with the premise that all their technology risks were covered. The good news is the industry responded.
Adam Cottini | Managing Director, Cyber Liability Practice | Arthur J Gallagher
Trusted advisors will play an ever increasing role in securing cyber insurance. Organizations realize that insurance terms can be positively impacted when better information is made available to the underwriting community. But at the same time, organizations desire impartiality and strict confidence when sharing critical network security details. Trust and confidence surrounding the sharing of critical cyber insurance underwriting information will demand continued attention.
Shannon Groeber | SVP, Cyber E&O Practice | JLT Specialty
Cyber continues to be a growth area for the insurance industry even though there have been events that should have caused hardening in the cyber market. It hasn’t happened because of the competition and the expansion of offerings. Plus, the backing of more reinsurers has added resources, which allows carriers to commit to the product.
Max Perkins | SVP, Global Cyber & Technology team | Lockton
Over the last year buyers are, more than ever, trying to quantify risk. These are not questions that can easily be answered, and I don’t think there is a complete answer yet but we are making good strides pulling together the components of the questions. There is also a greater awareness that cyber permeates all businesses and that “cyber” risk goes well beyond data.
Joe DePaul | Head of FINEX Cyber/E&O, North America | Willis Towers Watson
There was little moving the needle on pricing, even with the high profile and large scale events that occurred throughout the year. Overall it’s been a good story for buyers, especially if they can demonstrate increased levels of security and internal policy controls; in these scenarios we have been seeing underwriters offer premium decreases. Increased competition in the marketplace has also been a factor. Middle market clients saw a very competitive marketplace with aggressive pricing and broad policy language.
John Farley | VP, Cyber Risk Management Services | HUB International
Cyber insurance industry experts and the best of Silicon Valley have joined forces in significant ways and are collaborating to take a more comprehensive approach to cyber risk management. This is especially true as it relates to the underwriting process. Underwriters are beginning to depart from the traditional approach that was limited to questionnaires. They are expanding their efforts to “underwrite like a hacker.”
Jesus Gonzalez | Chief of Staff | Aon Global Cyber Insurance Solutions
2017 was the year to remember in ransomware assaults, specifically WannaCry, Petya, and NotPetya. These events not only raised an alarm, they were a call to action for firms to ensure incident response preparedness in advance of any future attacks.