6 October 2014 Insurance

Homeland’s Ridge forms cyber insurer with Lloyd’s

Tom Ridge, the first ever US Homeland Security head, has teamed up with Lloyd’s of London to launch an insurance company specialising in corporate cyber security policies.

The venture, Ridge Insurance Solutions, will sell cyber policies covering the cost of notifying customers that their data has been breached, hits to profits from negative publicity and the threat of extortion. The company will target sectors including financial services, retail and healthcare.

The company, based in Washington, will focus on covering small and medium-sized enterprises that will be able to purchase policies covering costs arising from cyber attacks of up to $50 million.

Ridge said: “Insurance need not be just a ‘policy’ written by an agent but a true focal point for assessing, identifying and correcting the impact of cyber risk on your business. This is not just about insurance, but helping and incentivising companies to manage their cyber operations more effectively. Partnering with some of the leading cyber syndicates in the Lloyd’s market has helped elevate the standing of our solution well above that of any standard cyber product.”

Brit, AEGIS London and Novae will be the lead underwriters on the new product with Barbican Insurance Group and ACE also participating. Guy Carpenter has also confirmed it is the broker.

Guy Carpenter said the product offers three components which are designed to help organisations meet the cyber security challenge head on.

An initial on-site assessment of existing cybersecurity capabilities is conducted by the Ridge assessment team to expose any potential system vulnerabilities and provide recommendations to reduce cyber exposures.

Secondly, a comprehensive cyber privacy and network protection insurance policy provides the central component of the solution. The policy provides coverage on a worldwide basis with a capacity limit of $50 million.

The final component provides remediation services in the event of a cyber-breach. The solution will deliver a rapid and robust response to any form of cyber intrusion, quickly isolating the intruder, shoring up the breach and limiting the business impact.

Nick Gralton, managing director of North American casualty at Guy Carpenter, said: “Guy Carpenter is delighted to have acted as the broker of record for this innovative and expansive cyber solution. Working closely with Tom Ridge and his team, we were able to help them establish the parameters of the solution, place the facility into the Lloyd’s market and also to arrange the supporting reinsurance programme.”

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