No longer the new kid on the block of insurance offerings, cyber has been enjoying a sustained period in the sun, with every day bringing new reports and market briefings emphasising the critical role cyber insurance has to play in maintaining the stability of the industry and society alike.
Among the swathe of market developments announced recently came the news of specialist insurer Brit’s decision to expand its cyber consortium, Brit Cyber Attack Plus (BCAP) – a cyber product designed to protect insureds from the impact of physical damage arising from cyberattacks. Speaking with Insurance Business, Adam Taylor (pictured), class underwriter for cyber at Brit, noted that BCAP has been in existence since 2015 and grew to a gross written premium of $100 million (approx. £79 million) in 2022.
Taylor, who joined Brit in 2015 and whose role has a specific focus on the insurer’s large business cyber portfolio and the BCAP consortium, noted that Brit sees it as its role to continually lead and innovate in the cyber insurance space.
“We have seen increasing demand for larger limits to cater for the emerging cyber threats in both the tangible and intangible space,” he said. “The move to increase the consortium’s limits was designed to support our clients as they move through the current heightened threat landscape while continuing to offer best-in-class physical and non-physical damage cover.”
The expansion of Brit’s cyber consortium is especially well-timed given the upheaval felt across the global markets in recent years. The past few years have given way to a heightened threat environment, Taylor said, which is related primarily to the rising malware and ransomware threats affecting companies globally.
“This is playing out across multiple industry verticals, but we have recently seen a trend of increasing threat activity against heavy industrial companies, particularly in the manufacturing and utilities space,” he said. “This heightened threat activity has led to an increased number of attacks creating both physical and non-physical losses for companies, with the potential insurable loss reaching catastrophic levels given the severity of such attacks.
“This is now playing out in reality, with the frequency of property damage events triggered by a malicious cyberattack continuing to rise. The ever-increasing interconnectivity of devices, the reliance on automation and the interdependent nature of information and operational technology is opening up exposures for companies that were previously benign.”
While the benefits of increasing technology deployment are well known, he said, the potential attack surface created needs to be recognised by companies and alternative risk mitigation strategies need to be implemented. BCAP is designed to offer coverage for clients across both the physical and non-physical, creating an affirmative product designed to respond to any form of malicious cyberattack whether that leads to tangible or intangible loss. And taken in combination with Brit’s claims expertise, clients are strongly positioned to respond to even the most catastrophic of cyber events.
Taylor noted that the response of the market to Brit’s developments has been great to see, with the insurer receiving “fantastic feedback” from all its key broking and distribution partners. Brokers continue to strive towards innovative solutions for their clients, he said, and they’re looking for solutions which cater for the ever-evolving threat landscape and offer meaningful coverage and limit scope.
As for what’s next, he said: “As we see the coverage scope within more traditional lines of insurance reduce relating to cyber, this will present further opportunities for innovation within the cyber insurance market. This combined with emerging threats and loss activity, will provide further opportunities to assess enhancements to our BCAP product offerings to provide the most meaningful solution to our clients.”
There is a pressing need for continuous innovation when it comes to the cyber insurance market, not least considering the fast-evolving nature of cyber incidents. From Taylor’s perspective, it is a “massively unspoken” aspect of the insurance market that industry players have always acted as pioneers when it comes to innovative risk transfer solutions.
“And given the fluid nature of cyber risk,” he said, “our position as cyber insurers is more important now than ever before to help our insureds respond and recover from cyber incidents.”
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