We’re excited to talk to you.
Management Liability and Specialty
Insurance from Nationwide
Our expertise will provide the solutions.
Our responsiveness will provide the speed.
And our financial strength will provide
Financial Institutions Liability
Cyber and Professional Liability
Employment Practices Liability
Nationwide and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2018 Nationwide
For your many sides, there’s Nationwide.®
Many companies have a standard
property program and are only
now waking up to the cyber threat
following recent attacks. As a result,
Marcin Weryk, underwriting manager,
cyber and technology, XL Catlin, said
there has been an increase in clients
looking for more inclusive property
policies with cyber bolted on.
But because of the mismatch
between property being an admitted
risk and cyber being non-admitted, it’s
often tricky to add on cyber, he said.
Companies are seeking guidance on
whether their property program will
cover them for a cyber event, he added.
To overcome the problem,
Stephanie Snyder, national cyber
sales leader, Aon Risk Solutions, said
that companies need to use the same
underwriter to provide their property
and cyber coverage to ensure the two
are streamlined. The need to work with
specialist property and cyber brokers
and carriers is also paramount.
“Many carriers are now making sure
that any type of cyber risk that’s bolted
on to their property policy is written
by the same underwriter,” she said.
“It helps to give them a better
aggregation of risk and eliminate any
gray areas or overlaps in coverage.”
A greater problem, said Newman,
is carriers’ understanding and appetite
to insure these risks. Given the limited
knowledge of cyber risk and a fear of
aggregation, he said, often the only
alternative has been for companies to
turn to the excess and surplus market.
“The very real fear that one piece of
malware could result in simultaneous limit
losses across a huge property portfolio
is what is preventing more insurers
from entering this market,” he said.
“Had NotPetya been targeted at
the U.S. rather than Ukraine, then
we could have witnessed an economic
impact well in excess of $50 billion,
much of which would have fallen on
the property market had they provided
affirmative cover for cyber risk.”
Despite this, great strides have been
made in aligning property and cyber
coverage, said Tom Reagan, managing
director and cyber practice leader,
Marsh. But there’s still a long way to go.
“Brokers and carriers have done
a great deal of work over the last few
years to try to align the two coverages.
In general, the property market has
continued to be responsive to physical
events arising from cyber attacks, but
on the other hand, the property market
has been moving towards excluding
non-physical cyber events,” he said.
Companies also need to work with
their brokers and carriers to identify any
gaps in their programs, said Weryk.
At the end of day, he said, risk managers
must decide between an overarching
policy covering all cyber and property
risks or having separate ones.
“They have to make a clear decision
as to whether they go for numerous
separate policies or explicit coverage
using one program,” he said. “Both
have merits and drawbacks, but it’s up
to them what suits their business.”
Education is another key area to
help companies, said Grace Reis, VP,
cyber risk insurance products, FM
Global. She said clients and brokers
need to understand how their policy
will respond to an event.
“You need to put in the groundwork
before an event happens,” she said.
“The last thing you want is to get a
nasty shock at 2 a.m. Companies need
to treat cyber as an enterprise risk that
affects all operations rather than just
an IT issue. In a business sense, cyber
and property may live in two different
segmentations, but companies need to
ensure they are plugging that gap.” &
ALEX WRIGHT is a freelance editor and
writer based in the UK. He can be reached