Limited expertise in cyber a concern
A key driver behind re/insurers’ concerns about cyber is the limited resource of expertise in the market, Luke Foord-Kelcey, co-head of Aon Benfield’s global cyber practice, told Monte Carlo Today.
Foord-Kelcey believes the cyber market requires an ever-broadening skill set, and that there is a trend among re/insurers to bring in new specialised talent, or to partner up with tech companies to address concerns surrounding security and data.
“We’ve worked very hard to try and introduce expertise across the piece, so our cyber practice is made up of people with backgrounds in the direct and treaty side of cyber broking, in law, in IT security, actuarial and modelling,” said Foord-Kelcey.
“Developing those resources and rolling that out across Aon Benfield has been key.”
Foord-Kelcey also suggests the availability of data will be paramount, what re/insurers should collect and what they are able to collect.
But even while Monte Carlo goers are distracted by the likes of Hurricane Harvey and Irma, Foord-Kelcey believes cyber coverage is evolving quickly as insureds begin to become more aware of their needs.
“When you pitched cyber insurance five or ten years ago people would say, ‘oh we’ve got great IT security’. Now insureds are aware that even the best IT security is still vulnerable to the most skilled hackers in the world.
“If you’re an SME and you’re seeing large technology companies fall victim to these breaches, then that reality dawns on you.”
Paul Mang, global CEO of analytics at Aon and Aon Benfield Analytics, spoke at Aon’s press conference in Monte Carlo, and suggested the data is there, it’s not just necessarily within the insurance industry, and companies must form partnerships to get access to these better sets of data.
“A year ago we thought there just wasn’t enough cyber data in the industry,” said Mang. “It’s true if you define the industry as the insurance industry. It turns out that technology firms have a lot of data."
Tech companies like Cisco, they monitor 600 billion email messages a day, and in that they find 1.5 million malware email messages.
Similarly, risk management firm Stroz Friedberg - acquired by Aon last year - currently monitors 1 billion records that have been leaked or were somehow part of a cyber event.
Mang continued: “There is a lot of data out there. The question is how will we as an industry be able to leverage it, and work with new technology to be able to model it to address our clients’ needs.”
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