Cyber Underwriters Dispel Myths About Pricing, Risk Assessment

Nick Economidis, underwriter at Beazley, wants to dispel a myth.

Speaking at Advisen’s Cyber Risk Insights Conference, he explained that underwriters are not “trying to measure individual companies’ risk and come up with a special price just for them.” He referred to models that provide an estimated cost for a risk type and size, based on average losses and probable maximum losses.

His message to the sold-out audience: “We want to kick out bad risks. We look at the general model price and adjust it based on the quality of risk.”

Read more at http://www.advisenltd.com/2016/05/23/cyber-underwriters-dispel-myths-about-pricing-risk-assessment/

Josh Bradford, Cyber underwriters dispel myths about pricing, risk assessment (May 23, 2016), available with subscription at Advisen Cyber Front Page News.

High Defense Costs and Increased Litigation Make D&O Market One to Watch

According to experts participating in Advisen’s Executive Risk Insights Conference in Chicago, the directors and officers insurance sector has been anything but business as usual in recent years.

Securities class action litigation offers one example of activity.

“In 2015, securities class actions lawsuits were at their highest level in six years,” said Kevin LaCroix, executive vice president for RT ProExec and conference chair. “But even more importantly, the number of class action lawsuits relative to the number of public companies was at its highest level in modern times.”

Read more at http://www.advisenltd.com/2016/05/23/high-defense-costs-and-increased-litigation-make-do-market-one-to-watch/

Josh Bradford, High defense costs and increased litigation make D&O market one to watch (May 23, 2016), available with subscription at Advisen Professional Front Page News.

Cyber Talent Shortage Complicated by ‘Deprioritizing’ in Colleges

Talent shortfalls remain an obstacle in the battle against cybercrime, with a Cisco report from earlier this year pinning the need for 2016 at one million cybersecurity jobs.

However, a study by security firm CloudPassage suggests that US colleges and universities aren’t meeting the demand, with not one of the country’s top 10 computer science schools as ranked by US News and World Report requiring a cybersecurity course for graduation. Three out of those 10 do not offer elective courses, either.

Read more at http://www.advisenltd.com/2016/05/23/cyber-talent-shortage-complicated-by-deprioritizing-in-colleges/

Erin Ayers, Cyber talent shortage complicated by ‘deprioritizing’ in colleges (May 23, 2016), available with subscription at Advisen Cyber Front Page News.

Property Insurers Retained More CAT Risk, Best Report Finds

Property insurers in the London, European, and Bermuda markets took on more catastrophe risk between 2012 and 2015 for 1-in-100-year events amid favorable pricing conditions, but drew more of a line at the riskier 1-in-250-year events, according to a recent analysis from ratings firm A.M. Best.

Best evaluated the probable maximum losses (PMLs) for 25 of the largest rated insurers in the field and found that although catastrophe exposure grew, it did not exceed expected levels, given the increased use of alternative capital vehicles.

Read more at http://www.advisenltd.com/2016/04/28/property-insurers-retained-more-cat-risk-best-report-finds/

Erin Ayers, Property insurers retained more CAT risk, Best report finds (April 28, 2016), available with subscription at Advisen Professional Front Page News.

New EU Data Protection Rules Could Mean Massive Fines for Businesses

On April 14 after four years of deliberation, the General Data Protection Regulation (GDPR) won final approval requiring businesses who deal with personal data of EU citizens, both in and outside of the EU, to strengthen their cybersecurity policies or face substantial fines.

“The new rules will ensure that the fundamental right to personal data protections is guaranteed for all,” said a statement released by the European Commission.

Read more at http://www.advisenltd.com/2016/04/28/new-eu-data-protection-rules-could-mean-massive-fines-for-businesses/

Josh Bradford, New EU data protection rules could mean massive fines for businesses (April 28, 2016), available with subscription at Advisen Cyber Front Page News.

6,000 Security Breaches Recorded Since 2005; 2016 Shows Faster Pace

Security breaches in the US since 2005 now total over 6,000 and the first few months of 2016 have resulted in 10 percent more breaches than the same period in 2015, according to the latest data from the Identity Theft Resource Center (ITRC).

As of April 19, 6.2 million personal records have been compromised, ITRC said in a recent report, and the increase in theft of Social Security numbers appears to be propelling a wave of tax fraud. Since 2005, when ITRC began tracking security breaches, over 851 million records have been exposed.

Read more at http://www.advisenltd.com/2016/04/28/6000-security-breaches-recorded-since-2005-2016-shows-faster-pace/

Erin Ayers, 6,000 security breaches recorded since 2005; 2016 shows faster pace (April 28, 2016), available with subscription at Advisen Cyber Front Page News.

Blog: Door’s Open, Come on in and Join the Cyber Property Party

As the cyber insurance industry grows, develops, and gains a better handle on the risk – or at least aims for that goal – there remains the problem of property. Cyber-related property damage is the party that very few want to attend just yet in the cyber world and with minimal data and less than a handful of incidents that have or could have caused physical damage, it’s still easy to pretend the e-vite got lost in the e-mail.

That doesn’t mean that insureds, brokers, and insurers aren’t all watching warily for any event that tips the scale from “potentially huge” risk to “actual risk that’s happened and might quite readily happen again.” Successful, damaging cyber attacks on critical infrastructure and/or industrial control systems currently appear to be limited to the 2010 Stuxnet attack on Iran’s nuclear power facilities and “that German steel mill” in 2014, but if the recent indictment from the US Attorney General against seven Iranian hackers for remotely tampering with the control system of a tiny, relatively inconsequential dam in upstate New York, more efforts should be expected.

Read more at http://www.advisenltd.com/2016/04/28/blog-doors-open-come-on-in-and-join-the-cyber-property-party/

Erin Ayers, Blog: Door’s open, come on in and join the cyber property party (April 28, 2016), available with subscription at Advisen Cyber Front Page News.

Risk Resiliency Combined with Risk Agility Translates Into Long-Term Success: PwC

Organizations that develop both resilient and agile business practices will see greater flexibility and success over time, according to a new study from PricewaterhouseCoopers (PwC).

“Companies today that leverage risk management as both an offensive and defensive tactic are leading the way in maintaining long-term success,” said Dean Simone, leader of PwC’s U.S. Risk Assurance practice. “Finding that right median will come differently to companies and industries across the board, but the key is to strike a balance that allows for growth at a comfortable pace, relevant to the risk appetite and tolerance levels set by management and accepted by the board.”

Read more at http://www.advisenltd.com/2016/04/28/risk-resiliency-combined-with-risk-agility-translates-into-long-term-success-pwc/

Erin Ayers, Risk resiliency combined with risk agility translates into long-term success: PwC (April 28, 2016), available with subscription at Advisen Professional Front Page News.

Cyber Risk Awareness Not Turning Into Action, Survey Finds

Many businesses, especially in Europe, fully understand the cyber risk they face, but have yet to implement solid plans to address it, including declining to buy cyber insurance, according to a new Risk:Value survey from NTT Com Security.

“Study any risk-based discipline for long enough, and you will see a worrying trend: A large proportion of people understand the risk is there, but often do not address the problem until it is too late. People smoke, fail to exercise and eat bad food, while admitting that they understand the mortality statistics. On a broader scale, we know the climate change risks, but continue to burn carbon at furious rates. It’s as though we are somehow programmed to procrastinate,” stated the authors of the report. “The same is true in cybersecurity. Organizations may understand the likelihood of an intruder stealing their data. They may even understand how badly it will impact them. But they often tend to react impulsively after the fact, rather than responding thoughtfully to a threat well in advance.”

Read more at http://www.advisenltd.com/2016/04/28/cyber-risk-awareness-not-turning-into-action-survey-finds/

Erin Ayers, Cyber risk awareness not turning into action, survey finds (April 28, 2016), available with subscription at Advisen Cyber Front Page News.

Executive Profile: Jack Kuhn, CEO, Global Insurance, Endurance Specialty Holdings

Endurance recently reported strong 2015 financial performance and all indications are that positive results will continue into Q1 2016 and beyond. Launched in 2001 as predominately a reinsurer, Endurance has transformed itself into a major global excess and primary insurance player. And, with the recent successful acquisition and integration of Montpelier Re, Endurance’s Jack Kuhn, CEO of Global Insurance, said the company is well positioned to recognize and make the most of opportunities in the marketplace.

Advisen recently got a chance to sit down with Kuhn to talk about an assortment of topics, including Endurance’s strategy for future growth.

Read more at http://www.advisenltd.com/2016/04/26/exoecutive-profile-jack-kuhn-ceo-endurance/

Chad Hemenway. “Executive Profile: Jack Kuhn, CEO, Global Insurance, Endurance Specialty Holdings.” Advisen Ltd. 1 May 2016. Web. 6 May 2016.

Interest, Good Claims Record Prompts Rapid Growth in Transactional Risk Insurance Market

The transaction risk insurance market has grown leaps and bounds in a remarkably short amount of time; in fact, 2015 saw a record number of representations & warranties policies written globally.

The rapid growth and interest in the market translated into a sold-out crowd at Advisen’s Transactional Insurance Insights Conference this week in New York.

“Five years ago, we may have been able to get 20 to 25 people together and talk about the subject,” said Peter Rosen, partner at Latham & Watkins and conference chair. “Ten years ago, no one would have even tried to host an event similar to today.”

He added, “We’re probably looking at approximately 750 policies written in the US in 2015 and 2,000 written globally. And the prediction is that the market is going to continue to grow as it is covering approximately only 15 percent of all private deals.”

Panelists agreed that the market’s positive track record on paying claims has assisted its meteoric growth.

Read more at http://www.advisenltd.com/2016/05/02/good-claims-record-prompts-rapid-growth-in-transactional-risk-insurance-market/

Josh Bradford. “Interest, good claims record prompts rapid growth in transactional risk insurance market.” Advisen Ltd. 2 May 2016. Web. 4 May 2016.