2019 US Insurance Awards: Marsh Cyber CAT 3.0, Broker Team of the Year (> $500 million)Posted On: May. 1, 2019 12:00 AM CST
The Marsh Cyber CAT product has gone through several iterations, but a desire to ensure a simple and consistent approach to covering major cyber exposures has always been at the heart of the offering.
“We needed to approach cyber in a way that’s not dissimilar from the way that property approaches a risk: That all-risk property policy and all the perils are there unless they’re expressly excluded or the carrier decides to pull some of it out so we started with the premise that all of a company’s technology perils are insurable,” said Robert Parisi, New York-based cyber product leader for Marsh LLC. “It’s meant for large sophisticated insureds that are willing to pay a sizable retention … looking to buy large limits: $15 million to $1 billion.”
In developing Cyber CAT 3.0, Aarti Soni, Marsh senior vice president based in New York, focused on ensuring the form responded to potential cyber losses under every scenario.
“Carriers are very trigger focused — what type of triggers create a loss — and I think our clients are very focused on loss and damage,” she said. “They’re concerned that any loss emanating from a cyber-type risk should be covered.”
She also examined potential overlaps and gaps between cyber and other policies such as property, kidnap and ransom and crime and ensuring losses not sufficiently addressed to date such as social engineering and electronic funds transfer are “brought into the cyber fold.”
The difficulty in crafting a product that stays current with such an evolving risk was highlighted by an Illinois Supreme Court decision in January allowing plaintiffs to sue firms for violating the state’s Biometric Information Privacy Act for allegedly failing to properly notify people about their policies even if no actual harm is claimed.
“It is a challenge for our entire industry because technology is going to continue to evolve, and as businesses are using more and more tech (such as biometrics) … that’s something our industry has to think about and make sure our policies are addressing one way or another,” Ms. Soni said.
Another major challenge has been the “tale of two markets,” as Mr. Parisi calls it. “North American carriers are more comfortable with their own form as opposed to a form from a broker, whereas the London market has more socialized to the form being driven by the broker,” he said.
Cyber CAT 4.0 was expected to be ready by the Risk & Insurance Management Society Inc.’s annual conference in Boston, according to Mr. Parisi.
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