Cyber events of the last 18 months or so—including high-profile data breaches, reports, litigation and legislation—has led to more industries turning to the cyber insurance market and has raised the level of sophistication of buyers.
Industries with obvious cyber risk, such as retailers, banks and healthcare, comprised a critical mass of cyber insurance buyers before the recent hyper awareness caused by a series of events shining a spotlight on this risk, explained Tom Srail, Technology, Media and Telecom Industry Leader for Willis North America.
However, the interest in cyber insurance from other industries—such as manufacturing, distribution, energy and transportation–has “definitely picked up,” he said. “They are at least going through the process [of assessment].”
Srail, Ben Beeson of Lockton and Tim Francis of Travelers joined Advisen for a webinar: Beyond the headlines: the 2014 cyber wave hits Washington
“People who didn’t think they had cyber risk because cyber risk equaled data breach/privacy risk, now are waking up to the fact that they do have cyber risk, but it may be espionage risk—sabotage risk; it’s property damage losses; it’s bodily injury losses,” added Beeson, vice president of Cyber Security and Privacy at Lockton. “In that context the buyer of cyber insurance is going to grow.”
Francis, Enterprise Cyber Lead at Travelers said that as he has spoken to agents and brokers, more industries outside of retail and healthcare are making the first contact.
“The conversation was the agent trying to explain to the insured what their exposures were and what kind of risk-transfer solutions are available,” said Francis. “I think there has been a change in that it’s not necessarily the agent that has to proactively make that call but it’s the insured themselves reaching out proactively to find answers.”
Srail said the rash of current cyber-related news and developments did not, for instance, cause a rush of retailers seeking coverage for the very first time because they had already been in the market for insurance. But news and developments have “raised the level of sophistication of buyers.” Companies are giving more thought to how cyber risk is transferred—looking more specifically at the quantification and giving though to captives, deductibles, self-insurance, etc.
During the webinar Beeson, Srail and Francis also talked about the Target data breach, Russian hackings, litigation, NIST and cyber-incident sharing.
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
