'Cyber risk is now a mainstream risk,' says Allianz as it launches new strategy
Allianz Group is launched a new strategy to address cyber risks in commercial, corporate, and specialty insurance policies of its property & casualty (P&C) companies, and has established a new center of competence to lead the initiative.
Allianz Global Corporate & Specialty (AGCS) will start updating and clarifying P&C policies beginning 1 January 2019 for new business and, beginning 1 April 2019, for renewal business. The implementation of the new cyber risk insurance strategy will start in a phased approach.
The insurer said it will update all traditional insurance policies to provide clarity and certainty on cyber exposures and coverage for customers. Changes to the actual language of policy wordings will vary across different lines of business and regional markets.
Under the updated wordings, physical damage and bodily injury arising from cyber events will generally continue to be covered in Allianz corporate, commercial, and specialty policies. Cyber-related ‘pure financial losses’ without physical damage or injury, however, will be covered in affirmative cyber insurance solutions only.
Allianz said the new strategy will help it better measure its cyber risk exposure and respond to growing interest from regulators and rating agencies in effectively managing cyber underwriting risks.
Hartmut Mai, chief underwriting officer, AGCS, said: “Cyber risk is now a mainstream risk to business and society and can trigger extensive damages or even result in bodily injury or life-threatening consequences. In most traditional P&C insurance products, however, cyber risks are not explicitly mentioned or considered today. This leads to inadequate protection for businesses and a lack of clarity for all parties involved - clients, brokers, and insurers.
"A new up-to-date insurance approach is required to counter cyber threats effectively. Customers need clarity and confidence, and our new approach will make it clear how cyber risks are covered in traditional policies.”
To lead these efforts, the company has established a Center of Competence for Cyber at AGCS, which will provide underwriting guidance, as well as specific services in risk modelling and crisis response through its partner network.
The new center will be headed by Emy Donavan, global head of cyber, media, & tech professional indemnity, AGCS. He said: “Customers need to know where they stand on cyber risk. We are providing clarity of coverage, which will give customers a higher level of confidence. Our policyholders will be able to choose among several options to tailor their cyber risk coverage to their individual needs and risk profile—from an endorsement to traditional policies to specialist cyber insurance policy.”
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