Insurance has traditionally been quite a slow-moving industry. Policies can sometimes run for years without the need for refreshment or major tweaks.
But one market is really forcing insurers out of any industry slumber …
cyber insurance.
“Suffice to say, cyber insurance moves at a pace that is unusual in insurance,” commented Tim Francis, enterprise lead for cyber insurance at
Travelers. “Insurers are making changes to their policies quite frequently – and that’s born out of the fact that our customers are using new technology, which is perhaps creating new cyber exposures.”
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Travelers bond and specialty insurance president, Thomas Kunkel, announced in a recent investor meeting that the company plans to stick to its current growth pace for sales of cyber insurance, despite the market’s potential. But when speaking to
Insurance Business in September, Francis assured the company won’t “stand pat on current [cyber] coverage solutions and services”.
“There’s a proliferation of insurers launching more and more different cyber products [into the North American markets]. Like everybody else, we’re always looking at how we can evolve our cyber policy language, whether it be through an endorsement or by redrafting and including additional service components,” he told
Insurance Business.
The insurer has increased its cyber business at a 40% compound annual growth rate since 2011. Successful growth and client retention requires keeping on top of cyber trends, according to Ben Hunter, managing director, middle market at
Travelers Canada.
“Just a few years ago, the majority of cyber policies were centred around issues related to data breach and the exfiltration of personally identifiable information,” said Hunter. “But over the years,
lots of other coverages have been added to cyber policies to deal with events that are outside of the traditional data breach.
“Most businesses now rely on computers and software to a large extent. We have seen tremendous growth in coverages addressing issues related to cybersecurity, functioning software solutions and business continuity. I really see the trend for that continuing, with cyber insurance products covering more and more over the years.”
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