As data breach and spread of malwares to interrupt daily operations have become rampant these days, there is a growing need to employ cyber insurance for compensating losses.
Businesses and governments have realized the importance of employing cyber insurance. From hedge funds to governments, every institute and organization has bought various cyber coverage policies to be on the safe side. Moreover, market players have been collaborating with each other to gain a competitive edge and offer innovative services.
The industry for cyber insurance has been undergoing an upsurge in recent years and will continue to rise in coming years. According to the report published by Allied Market Research, the global cyber insurance market is expected to reach $14 billion by 2022. Following are some of the activities that outline the importance of cyber insurance and recent happenings in the industry:
Cyber coverage especially for hedge funds
Almost every sector across the world is under threat from sophisticated attacks. Hedge funds are no exception. California-based Alliant Insurance Services Inc. launched cyber insurance for hedge funds.
The Cyber Risk 360° involves a cyber coverage policy with a facility of coverage extension for unplanned attacks and losses. This would help managers recover losses incurred from unexpected attacks. Moreover, the insurance covers a cyber preparedness evaluation, incident response & crisis management, relentless 24/7 system monitoring to determine and counter cyber threats, and legal counsel.
Crystal Financial Institutions is a unit of Alliant Insurance Services. Crystal collaborated with a cybersecurity company BlueVoyant and a law firm Bohrer PLLC along with Everest Insurance, a unit of the Hamilton for development of the product.
Collaboration for new coverage pack
The collaboration and launch of new coverage for small and medium enterprises continue as AT&T joins hands with Lockton Affinity and CNA. This coverage is known as CNA Epack Extra and it will back up business interruption and extra expenses.
In addition, it will cover privacy injury liability, network security liability, network extortion, and data restoration costs. The coverage would also incur privacy event costs, privacy regulatory civil fines, and penalties.
AT&T outlined that this policy would help businesses to monitor, reduce, and transfer cyber risks. Danessa Lambdin, AT&T’s Business Vice President for cybersecurity solutions stated that AT&T Managed Cybersecurity Solutions offer excellent cyber protection with a combination of cybersecurity technologies and access to cyber insurance through CNA. Businesses can recover from cyber attacks with this policy.
New product by an Israeli firm
Market players have been offering their innovative services through the launch of new products.
An Israeli cyber insurance provider KOVRR launched a silent and affirmative cyber risk product. This product helps insurers and reinsurers to determine uncalculated capitals that are under risk and identify policy clauses that are liable at the event of a cyberattack.
The predictive models launched by the KOVRR are developed for insurers of every size. The offerings in silent risk involve a service for analysis of policy wording of insurer and determine potential losses processes. Then an automated process builds entirely tailored risk scenarios for simulation of loss processes, calculation of loss costs, and correlations.
These risk scenarios will be updated by Kovrr’s global threat intelligence stream. This stream tracks nearly millions of real-time incidents. The final result has been offered by insurance professionals after a thorough understanding of cyber risks impacting the issued by the insurer. The platform of KOVRR uses emerging cyber risk models to enable insurers to gain a long-term competitive edge.
Generali’s new cybersecurity subsidiary
With growth in number and complexity of cyber attacks, various businesses are launching their stake in the cyber insurance industry.
The Italian firm Generali has launched a new Cyber Insurance function along with a cyber insurance subsidiary to address the cyber risks. The Cyber Insurance function will be backed by the subsidiary named as GeneraliCyberSecurTech. The subsidiary will provide cyber risk assessment solutions with the help of a web-based platform.
The offerings will be delivered across Europe, Asia, and North American regions. Another platform named Majorana has been launched for utilization of innovative methodologies for handling risks and enabling implementation of cyber insurance offers. This platform collects and analyzes customer data for potential risks along with reviewing of vulnerabilities in IT infrastructure.
These results are analyzed with the help of a proprietary algorithm to develop an insurance policy and the report is shared with the customer. Innovative technologies such as machine learning and artificial intelligence have been used to mitigate risks and provide an insurance cover.
Government entities to buy cyber insurance
As the number of intricate cyber attacks has increased in municipalities, the Houston’s City Council has bought a cyber insurance for $471,000. According to the Council, this insurance covers up to $30 million in expenses regarding the data breaches.
These expenses involve recovery of losses, crisis response, and legal costs occurring from cyberattack claims. The insurance coverages have been written by the Lloyd’s of London, Indian Harbor Insurance Company, and Endurance American Insurance Company.
The omnipresence of cybersecurity threats across various city governments has prompted Houston to buy the insurance. There have been sophisticated cyber attacks and it has become increasingly difficult to determine the location from which these online scams are occurring.
The governments have been preferring an option of cyber coverage to be on the safe side. However, there is a difficulty occurring in employing effective cyber protection measures. Various departments have been using different software and platforms. Some of them are using cloud software while some of them deployed on-premise storage systems.
Organizations have been looking forward to unify the system and achieve consistency.