More cyber risks being covered through captives: MarshReprints
The number of owners using captive insurers for cyber liability programs increased by 19% in 2016 vs. 2015, which represents the fastest growing nontraditional risk in captives managed by Marsh L.L.C., says the broker in a report issued by Marsh Captive Solutions.
Overall, the number of captives increased by 40% between 2006 and 2016 to more than 7,000 from about 5,000, according to the report, “Captives at the Core: The Foundation of a Risk Financing Strategy, How Organizations Around the World Use Their Captive Insurers.”
Discussing including cyber risks in captives, the report issued Monday said: “We expect to see continued increase, driven in part by companies that are already strong captive users and by those that may have difficulty insuring their professional liability risks.
“The potential advantages for using a captive for cyber liability include accessing reinsurance for cat limits, filling gaps in standard cyber policy language, securing coverage for emerging and unique cyber risks and consolidating cyber programs across operating companies.”
Top industries with captives writing cyber liability were communications media and technology; financial institutions; real estate/hospitality and gaming; retail and wholesale, food and beverage; and transportation, according the report.
The report’s introduction by Nick Durant, New York-based president of Marsh Captive Solutions, says: “As captives are used to address a growing range of risks, they are also heling clients break down operational silos between risk management, human resources and business development.”