WIN Magazine - Summer 2015 - (Page 32)

FEATURE Cyber Warfare An Emerging market for the Excess and surplus lines market I By michAEl fiElding N rECENT YEarS, the likelihood of a data breach or cyber attack has increased exponentially, and the need for a data security and privacy insurance product is higher than ever, forcing risk specialists and companies to turn to non-admitted, excess and surplus lines carriers. According to FBI Director James Comey in an interview with CBS's 60 Minutes, "There are two kinds of big companies in the United States. There are those who've been hacked, and those who don't know they've been hacked." The risk of a cyber breach not only exists for large companies that handle sizeable amounts of data, but even retail businesses handling personal information such as customers' credit cards. The International Organization for Standardization (ISO) established policies that are made available to businesses by standard admitted carriers. These insurance carriers also provide cyber endorsements for existing Business Owners Policies (BOP). 3 2 | v i e w t h i s i s s u e a t | These forms of coverage may be sufficient for a small firm; however, midto large-size companies may need customized policies, giving specialty carriers an opportunity to promote products in a rapidly growing market. As such, there is still a need for standalone cyber risk policies, which provides specialty carriers with an opportunity to design new products in a rapidly growing market. The frequency and severity of cyber attacks on U.S. firms has been rapidly increasing over the last few years, which is making it more difficult for firms to implement risk retention methods and ultimately resolve the repercussions. A survey conducted by the Ponemon Institute with HewlettPackard of 59 large-sized U.S. firms found the average annual cost of responding to cyber attacks was $12.7 million, up 96 percent over the previous five years (HP Study). The survey also suggests there is a positive correlation between the time it takes to resolve an attack and the amount of costs incurred. Specifically, the study finds:

Table of Contents for the Digital Edition of WIN Magazine - Summer 2015

Why Inspections Matter: Ascertaining the True Liability of the Risk
Why You Might Want to Consider an Agency Captive
AAMGA 2015 Winning White Papers
Why the BP Macondo Gulf Blowout is Important…and It’s Not What You Think
Terrorism Risk: Industry Challenges & Opportunities
Cyber Warfare: An Emerging Market for the Excess and Surplus Lines Market
The Genomic Revolution: Where Does Insurance Play a Role?
WIN Magazine Marks Fifth Anniversary: The Voice of the Wholesale Insurance Network™
Education, Networking and Leadership: Wholesale Insurance Professionals Gather at AAMGA’s University East
In the WIN-ner’s Circle: An Interview with Matthew H. Letson
Index of Advertisers

WIN Magazine - Summer 2015