WIN Magazine - Summer 2015 - (Page 32)
An Emerging market for the Excess and surplus lines market
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).
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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
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