Getting business back on track tops cyber concernsPosted On: Apr. 10, 2016 12:00 AM CST
Businesses of all types put business interruption resulting from a breach at the top of their cyber risk concerns, according to a report issued Monday by Aon P.L.C.'s Aon Risk Solutions unit at the Risk & Insurance Management Society Inc.'s annual conference in San Diego.
The “2016 Cyber Captive Report” said that though “media coverage of cyber incidents tends to focus on data privacy and regulatory fines, clients' No. 1 risk concern across the board is business interruption, both during and after a breach. With continued digital transformation, we see this risk remaining at the top of executives' cyber risk concerns across all industry groups.”
“Large entities across multiple industries across multiple geographies do not necessarily think the existing solutions address their particular problems,” said Kevin Kalinich, global practice leader for cyber/network risk at Aon Risk Solutions in Chicago. “That means the existing solutions are geared toward retail, health care, financial institutions and hospitality, which are important segments. There actually is a basic awareness that there are huge cyber exposures outside of those categories that have not been focused on by the insurance carriers.”
Regarding cyber insurance, about 71% of surveyed companies listed terms and conditions as their top issue in the cyber risk market place, followed by pricing at 48%.
“It is unsurprising that terms and conditions are listed as the greatest issue in the cyber risk marketplace, due to lack of consistency among markets and the immaturity of the product,” said the report.
“Clients are looking for clear policy language, they're looking for a clear adjustment process, and they're looking for a good clear risk assessment process,” said Peter Mullen, CEO of Aon Risk Solutions' captive and insurance management practice in Bermuda.
The report asked respondents whether they would be willing to share risk with other companies in their industry as part of a captive facility dedicated to writing cyber risk, provided that they were comfortable with the underwriting process. An overwhelming majority — 94% — said they would be, depending on the scope of coverage, cited by 56%, and limit size, 37.6%.Aon Risk Solutions' first cyber captive survey, conducted in fall 2015, gathered input from 128 of Aon's top captive clients.