Insurance Journal and MyNewMarkets.com track hundreds of new insurance products and services every year. In 2012, the industry launched numerous new coverages, enhancements, and services focused on a few specific areas: cyber/data breach; cargo; and weather. This 2012 new market summary details the product trends in these top three segments, and how insurance companies are responding.
#1 – Cyber Services
The cyber insurance market has been a hot commodity, but a hard sell. However, insurers reported this year that awareness is finally increasing among all business segments, particularly for small to medium-sized enterprises. Smaller and regional carriers have also realized that marketing these products with value-added services like data breach mitigation and response efforts are a huge selling point.
“Carriers on the smaller side see it as an advantage to offer our services,” says Matt Cullina, CEO of Identity Theft 911, a company that works with over 180 carriers, as well as consumers, on preventing and responding to data breaches. “When our services get in the mix it helps break it down for the consumer and helps have the business get up to speed. What we have also seen in our statistics is that businesses become more loyal to the insurance company because it was watching their backs on this risk before it was a big deal.”
Cullina says carriers also see the benefit of giving insureds the tools they need to understand how to prevent a breach. “How a company manages their data and their online world becomes more indicative of how they handle their employee risk. It all weaves together,” he says.
Carriers are also designing these programs with value-added services for niche segments to provide more specialized tools.
Just a few of the products launched in 2012 featuring these services include:
- AmWINS partnered with Premier Insurance Management Services and Beazley to provide a data privacy and network security insurance product for hospitals. The program features Beazley Breach Response, a privacy breach response management and information security insurance product with coverage for breaches that affect up to five million people – including notification and credit monitoring.
- NAS Insurance Services expanded its NetGuard Plus to K-12 schools and its Allied Medical Facility. The coverage features access to NAS’ data security risk management website, and covers privacy breach response costs, network asset protection and cyber terrorism and cyber extortion. NetGuard also provides coverage for credit monitoring costs, network security and privacy, data recovery and media liability costs. NAS also launched BrandGuard to pay companies for lost revenue resulting from a cyber breach.
- R K Harrison contracted with Stroz Friedberg to provide pre-incident cyber consulting services for clients who purchase cyber liability policies through the employee-owned international brokerage. The complimentary services include assistance in mitigating cyber security risks, preparation with potential exposures, and enhancing compliance functions.
- Chartis enhanced its CyberEdge network security and privacy insurance products to include coverage for litigation stemming from a network security or privacy breach. The policy also covers the costs associated with managing and addressing a privacy event, network interruption or cyber extortion theft. Insureds are also given access to services aimed at preventing cyber losses. The carrier also formed an arrangement with Assurex Global to provide Cyber Edge to its partners, which includes access to the eRisk Hub risk management and loss prevention portal.
- Cincinnati Insurance partnered with IDentity 911 to provide risk management and data breach response services to policyholders.
- IDentity Theft 911 and the American Association of Insurance Services (AAIS) also released a sample data breach endorsement for carriers to use on small and mid-size commercial accounts.