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ACORD, the Association for Cooperative Operations Research and Development, said Monday it has released the industry’s first standard for cyber data breaches.
Separately, Aon P.L.C. issued a study Monday that found the U.S. cyber insurance market is growing in premiums and market participation.
The new standard, which was developed in collaboration with Aon and Beazley P.L.C., facilitates fast, accurate data exchange among stakeholders in multiple lines of businesses, including insurers, agents, brokers and software providers, the Pearl River, New York-based association, Aon and Beazley said in a joint statement.
It said the standard establishes a baseline for compliance and audit-related activities and enables solution providers to leverage standards for increased support.
ACORD said in its statement that Aon and Beazley collectively focused on data breach, examining common challenges with manual, disparate practices for sharing information during risk assessment and policy workflow. ACORD then synthesized these components to create and refine the draft standard.
ACORD said the standard is being made available immediately to its members for review and feedback and will be incorporated into the next release of the ACORD property/casualty standards, which is estimated to take place in January 2019.
The standard will continue to evolve as the market expands and adapts in alignment with ACORD’s member requirements, the statement said.
According to the Aon study, the number of cyber insurers increased to 170 in 2017 from 140 in 2016, while direct written premiums increased 37%, to $1.84 billion, compared with 2016, according to the study.
The study, U.S. Cyber Market Update, 2017, U.S. Cyber Insurance Profits and Performance, is based on National Association of Insurance Commissioners data.
Among other findings, loss ratios have also improved. The direct incurred industry loss ratio was 32.4% across all policies, compared with 2016’s 47.6%. In 2016, the NAIC included adjusting and other expenses in loss ratios, which averaged 1.7 loss ratio points.
Aon said the 2017 loss ratio was primarily because of a reduction in claim severity. The average 2017 claim size across all companies was $56,688, compared with $90,865 in 2016.
Australia-based insurance broker Austbrokers Holdings Ltd. said that local firms could face increased costs, reputational damage, loss of customers, and a class-action lawsuit under the country's mandatory notifiable data breach legislation, SecurityBrief Australia reported. Nigel Thomas, divisional chief executive at Austbrokers, said that organizations could be fined up to $2.1 million Australia ($1.6 million) for failing to keep its data secure. Austbrokers said that 54% of companies either have a cyber insurance policy or plan to implement one in the next 12 months.