Reinsurance giant Munich Re and Lloyd’s of London insurer Beazley are to offer enterprise-wide cyber protection for the digital assets of the world’s largest companies, in response to intensified hacking threats.
Beazley, described as “a pioneer in data breach response insurance and the largest insurer of cyber liability risks in the Lloyd’s market,” has partnered with the corporate insurance partner unit of Munich Re. The partners say that they are able to offer “the broadest protection yet for the digital assets and IT infrastructure of the world’s largest companies.”
Coverage options have been developed in collaboration with several large companies and their brokers. The needs of such organisations vary widely and cover will be tailored specifically to the exposures of individual clients, providing up to US$100m or €100m of protection for a wide range of cyber risks.
Based on the individual needs of clients, coverage can be tailored to include elements for risks such as:
• Hacking or malware attacks: Such attacks have been growing steadily in scale and frequency. In the US alone, 193.5m customer records have been stolen in large breaches involving more than 10m records apiece in the past two years.
• Distributed denial of service (DDoS) attacks: Half of all major US companies sustained a denial of service attack to their websites last year and more than 10% of these attacks interrupted the companies’ web-based service capabilities. The potential for significant business interruption losses from a successful DDoS attack is high.
• Cyber extortion: So-called ransomware attacks have recently intensified. Those that have been disclosed have generally been small in scale. But the potential undoubtedly exists for far larger cyber extortion attempts.
• Property damage and bodily injury exposures deriving from malicious cyber attacks: The impact of an attack on the smooth functioning of plant and machinery and the safety of employees, with the increasing interconnectivity of systems, is becoming more and more severe.
The two companies report that they have seen significant demand for this type of insurance cover and have already bound insurance for multinational clients.
“Rapidly flowing data is the lifeblood of modern business,” said Mike Donovan, Beazley’s focus group leader for technology, media and business services. “When that data ceases to flow, or is siphoned off, the costs for large interconnected enterprises can be huge.
“We can now provide the kind of robust and flexible protection that large businesses need at a time when cyber threats are proliferating worldwide.”
Chris Storer, head of cyber solutions for Corporate Insurance Partner, which is dedicated to industrial clients and part of Munich Re’s Risk Solutions activities, added: “In recent years, cyber threats have risen steadily up the agenda of the world’s largest companies as they have observed the real impact of cyber incidents, with significant implications for their balance sheet and financing capabilities, through to dealing with regulators and rating agencies.”
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